Answers To Some Questions That I Have Been Asked Recently And That Are Of Interest To Investors In Canada

Answers to Some Questions that I have been asked recently and that are of interest to investors in Canada.

This series of expositions is not a compendium of Canadian mining legislation, as the topic is simply too broad for the scope of this questionnaire . Canadian mining legislation is location dependent, and there are many, many locations: 10 provinces and three territories, each with their own laws and, within each province or territory, Aboriginal land claim settlement areas or reserves; areas where the acreage is owned by the Crown or Aboriginal groups or privately; and areas where minerals are owned by the Crown or Aboriginal groups or privately. Canadian mining legislation is also commodity-dependent, with different laws applying to hard rock minerals, coal, industrial minerals, oil and natural gas, uranium, etc.

As a cautionary note, everything stated above is intended to be indicative only. Even when the topics are discussed in some detail, they are not intended to be complete and nothing contained in this series of expositions should be considered a legal totality.

1. What regulates mining law?

Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of 10 provinces and three territories. Canada’s judiciary is independent of the legislative and executive branches of government. Responsibilities and functions under this democratic structure are distributed through a federal system of parliamentary government whereby the federal government shares governing responsibilities and functions with the provincial and territorial governments pursuant to the division of powers under the Constitution Act, 1867 .The Prime Minister, elected by the public, is the head of government in Canada.

Certain areas within the federal government’s jurisdiction may affect a mining project, for example: Aboriginal rights; trade and commerce; railways; nuclear energy; and environmental matters that involve matters of federal jurisdiction, such as fisheries. However, most of the areas which will affect a mining project are within the provincial governments’ jurisdiction.


2 Which Government body/ies administer the mining industry?

Pursuant to the division of powers under the Constitution Act, 1867, both the federal government and the provincial or territorial governments regulate mining activity in Canada .The exploration, development and extraction of mineral resources, and the construction, management, reclamation and closure of mine sites, are all primarily within the jurisdiction of the provinces of Canada, and the Yukon and the Northwest Territories (with some exceptions). In Nunavut and certain areas of the Northwest Territories, public lands and natural resources are governed and administered by the federal government. Other than Nunavut, each province and territory has its own mining legislation and mineral tenure system, though certain mineral rights in the Northwest Territories are administered by the federal government. The provinces and territories (other than Nunavut) own the majority of the mineral rights in Canada, though mineral rights may also be held by private entities, by Indigenous groups, and by the federal government. In Nunavut, mineral rights are owned by the federal government, by Indigenous groups or by private entities.

Federal government involvement in the regulation of mining operations is limited to those undertakings that fall within federal jurisdiction. These specific undertakings include uranium, in the context of the nuclear fuel cycle (i.e., from exploration through to the final disposal of reactor and mine waste), mineral activities related to federal Crown corporations, and mineral activities on federal lands and in offshore areas. The manufacture, sale, use, storage and transportation of explosives used in exploration and mining also all fall within federal jurisdiction. These are regulated under the federal Explosives Act. Federal jurisdiction also covers the export, import and transit across Canada of rough diamonds, which is regulated under the federal Export and Import of Rough Diamonds Act. The federal Extractive Sector Transparency Measures Act creates stringent reporting standards for Canadian oil, gas and mining companies, in order to implement Canada’s international commitments in combatting domestic and foreign corruption. All: (i) entities that are listed on a stock exchange in Canada; and (ii) entities that have a place of business in Canada, do business in Canada or have assets in Canada and that meet certain thresholds, must report payments including taxes, royalties, fees, production entitlements, bonuses, dividends and infrastructure improvement payments of 100,000 Canadian dollars or more, in the aggregate, to local and foreign governments, including Indigenous governments.

Any mining disclosure made available to the public in Canada (whether oral or written, and including presentations to investors and disclosure on a mining company’s website) is governed by National Instrument 43-101, Standards for Disclosure in Mineral Projects. This instrument was developed by the Canadian Securities Administrators and is administered by the relevant provincial and territorial securities commissions.

(To Be Continue)


Answers To Some Questions That I Have Been Asked Recently And That Are Of Interest To Investors In Canada
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