Originally published in the Canadian Mining Journal, October 6, 2024.
On May 28, 2024, Bill 63, a proposed amendment to the Mining Act, was presented to the National Assembly (Québec). Bill 63 marks the first significant reform of the Mining Act since 2013 and is deemed by the Ministère des Ressources Naturelles et des Forêts (MRNF) to aim at enhancing transparency, improving land use coordination, providing a better framework for exclusive exploration rights, raising environmental requirements, maximizing the benefits of extracted mineral resources, and increasing overall efficiency for the entire Québec mineral industry. This change, along with the recent introduction of the new Impact Exploration Authorization (IEA), which came into effect in May 2024, reflects the Québec government’s overall aim at modernizing mining laws in Québec to further protect the environment and local communities.
Changes with respect to mining rights
Among the many significant updates brought by Bill 63, a considerable change consists of the replacement of the term “claim” with “exclusive exploration right.” This terminological change is indicative of Québec’s shift away from the free mining regime, as it is concurrent with the implementation of new methods for granting, selling, and renewing a mining right, as well as certain conditions governing its exercise.
More specifically, with respect to exclusive exploration rights renewals, the modifications impose a minimum requirement regarding the cost of work executed. Pursuant to section 36 of Bill 63, holders of such rights will only be able to renew or sell their rights once 90% of the planned exploration work has been carried out. They are also required to pay the minister an amount equal to twice the difference between the minimum cost of the work that should have been performed and the work reported.
While these stricter requirements may impact investments in the mining sector, they nonetheless serve to prioritize legitimate mining projects by curtailing the acquisition of rights for the sole purpose of upselling. With approximately 350,000 claims in Québec, it is estimated that solely 13% to 17% are currently undergoing active work.
Moreover, other updates regarding mining rights include the addition of “minerals and crystals” to the resources defined as “surface mineral substances.” Therefore, any exploitation of such resources now requires a lease for the exploration of surface mineral substances. Bill 63 also provides that the mining of mining residues is now subject to the obligation of obtaining a mining lease.
Changes with respect to Indigenous communities
First, to harmonize mining operations with Indigenous activities related to food, rituals, social practices, and other traditional pursuits, Bill 63 introduces a new provision that facilitates Indigenous participation in the delimitation of land boundaries by allowing the government to enter into agreements with the respective Indigenous communities.
- Second, Indigenous rights are further safeguarded by way of ministerial protection. Bill 63 thus increases the minister’s powers, specifying that the minister may take into consideration impacts on Indigenous communities when granting mining leases;
- must notify the Indigenous community concerned of the existence of any exclusive exploration rights;
- may impose conditions to prevent impacts on Indigenous communities;
- may impose conditions and requirements on exclusive exploration right holders to prioritize or reconcile land use and preservation;
- has discretion to require the holder of a mining right to remove or move any property or extracted ore to prevent impacts on Indigenous communities; and
- may refuse an exclusive exploration right for any public interest reason, namely, to prevent or limit impacts on local and Indigenous communities.
Private land prohibition
Likely in response to the consultation reports by the MRNF from spring 2023, which provided an opportunity to gather the concerns and ideas of the public and various stakeholders interested in the subject, Bill 63 will prohibit the mining or prospecting on lands in the private domain and within urbanized perimeters. Thereby, any mineral substance that forms part of the private domain is withdrawn from prospecting, mining exploration, or mining excavation. Nonetheless, exceptions may be made at the request of municipalities and in such cases, mining exploration will still require the consent of the landowners.
Environment impact assessment
To ensure better environmental protection, Bill 63 provides that all new mining projects in Québec will now be subject to the environmental impact assessment and review procedure provided under the Environment Quality Act (EQA). Such change will update the obligations and process for rehabilitating and restoring mining sites to introduce, among other things, an obligation for the holder of a mining lease to perform monitoring and maintenance to ensure follow-up on the holder’s rehabilitation and restoration work.
Conclusion
In short, Bill 63 provides for a reform of the Mining Act and related regulations by providing for further environmental protection, increasing ministerial powers to ensure regulation of mining activities, safeguarding of the interests of Indigenous communities, and prohibiting excavation on certain lands. By introducing stricter requirements for exploration rights and ensuring sustainable development, Bill 63 seeks to create a more accountable, transparent, and efficient mineral industry in Québec.
François Brabant is a partner at Dentons Canada and the leader of the securities and corporate finance group in the Montréal office. He practices securities and corporate finance, M&A, corporate and commercial law.
David Gravel is a senior associate at Dentons Canada in the corporate group of the Montréal office. His practice focuses on M&A and securities law.
The authors would like to thank Ana Grubac, summer student, for her contributions to this article.
