April 21, 2016
On April 15, 2016, Bill No. 149, The Mineral Resources Act (2016) (2016 Act), passed its second reading in the NS House of Assembly. Although the 2016 Act does contain some good news for the industry, there’s some risky news too: its provisions could have a significant impact on the mining industry in Nova Scotia, even though it’s not a complete overhaul of the current regime.
Here’s what’s good, what’s risky and what’s neutral in the 2016 Act.
THE GOOD NEWS
The 2016 Act does contain some “good news” for industry members:
Extended Timing. The 2016 Act extends several timelines relative to The Mineral Resources Act (1990) (1990 Act), arguably making them both more realistic and administratively feasible for both industry members and the government:
New Planning Requirements. The 2016 Act also mandates new planning requirements for certain industry participants that generally reflect current industry trends and best practices, despite imposing additional obligations on participants and permitting the Minister to intervene in the event of non-compliance:
THE RISKY NEWS
But the 2016 Act isn’t a completely “good news” story for industry members; the 2016 Act raises some real uncertainties and risks of which industry members must be aware and for which they must be prepared:
Provincial royalties in limbo. The 2016 Act is notable for what it doesn’t contain: provisions on royalties payable to the province that are detailed in the same degree as those in the 1990 Act. In particular, the 2016 Act doesn’t address the amount and calculation of the royalty; instead, the instructions for determining rates and amounts of royalties payable will be set out in the regulations – which haven’t yet been developed – creating a high degree of uncertainty around a very important issue. The government, in the second reading debates, indicated that the regulations will be drafted in the next few months.
New investigation powers & new privacy concerns. The 2016 Act gives the Mine Assessor and other officers expanded powers of entry and investigation that may cause industry members some concern about privacy. In particular an officer, when obtaining information on the amount and value of the output of a mine, may “use any computer system at any place to examine any data contained in or available to the computer system”, amongst other powers (sections 123, 124 and 128). From a risk management perspective, industry members should consider data storage and retention policies for sensitive information not required to be provided to the Crown or retained under the 2016 Act. The 2016 Act also gives conservation officers a new enforcement role (section 20) and with it, powers of arrest (section 129).
More offences & graver penalties. The 2016 Act adds offences and stiffens the penalties for them, and an industry member’s obligations for making a mistake under the 2016 Act could look very different than it did under the 1990 Act:
Ministerial consent for lease and registration transfers. The Minister’s written consent is still required for a transfer of a lease or non-mineral registration, but the 2016 Act will expand the scope of what is deemed to be such a transfer. Absent proper planning, this expanded requirement could delay certain transactions. Both the sale of a controlling interest in a corporation holding a mineral right or non-mineral registration or the transfer of a mineral right or a non-mineral registration from a parent to a subsidiary will be deemed to be a transfer requiring the Minister’s written consent (section 105). The 1990 Act was silent in this respect.
THE NEUTRAL NEWS
There are some changes in the 2016 Act that, while different from the 1990 Act, may have limited practical impact on industry participants:
Lease distinctions. The 2016 Act eliminates the distinction between a “special lease” and a “mineral lease” found in the 1990 Act. However, this seems more a change in name than practical substance because the Minister still retains the authority to withdraw lands from being subject to an application for a mineral right for all or certain minerals (section 59).
Administrative Decision-Makers. Cabinet may appoint a commissioner or establish a board to hear appeals of decisions made under the 2016 Act, and the Minister may delegate decision-making for surface access rights to this new decision-maker (section 22). However, this structure must first be enabled through regulation and it’s not yet apparent whether Cabinet will ultimately appoint a board or commissioner or if it does, what decisions it will delegate.
Please contact your McInnes Cooper lawyer or any member of our McInnes Cooper Mining Law Team to discuss this topic or any other legal issue.
McInnes Cooper has prepared this document for information only; it is not intended to be legal advice. You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.
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