What's on Practical Law? Show less Show more. Ask a question. Mining in Canada: overview. Podowski, Brian P. Dominique, Mark T. Related Content. This article highlights some of the key legal issues commonly associated with the exploration and extraction of mineral resources in Canada. These issues form part of any due diligence exercise conducted by an investor proposing to acquire mining assets or an interest in a mining project.
This article looks at mining investment, the legal system applicable to mining, various mining laws, mineral ownership in, different types of mining tenements available, rights of miners to access land against landowners' rights, imposition of royalties and other taxes by the various levels of government and rules and restrictions concerning foreign investment in Canada.
Overview 1. What are the recent developments in the exploration and extraction of mineral resources in your jurisdiction? Federal environmental assessment A proponent looking to develop a major mine in Canada is subject to an environmental assessment under both federal and applicable provincial environmental assessment statutes see Question 6. The current Canadian federal legislation with respect to environmental assessments is the recently enacted Impact Assessment Act.
Changes enacted by the Impact Assessment Act include:. A one project, one review approach aimed at integrating provincial and federal environmental assessments. Statutorily enacted Indigenous review and consultation through the public process. Co-ordination of reviews by applicable Government of Canada departments. A more comprehensive approach to the assessment of cumulative impacts, including social, regional and strategic impact assessments and changes to how cumulative impacts are considered for individual projects.
The intention is to streamline the environmental review process, create greater transparency, and provide a greater voice to Indigenous communities with respect to consultation and accommodation.
This is expected to increase public confidence in the assessment process and outcomes. Indigenous consultation The federal government has adopted and stated its intention to align its laws and Canada's relations with Indigenous groups closer to the principles set out in the United Nations Declaration on the Rights of Indigenous Peoples in the context of the Canadian Constitution see Question British Columbia Mines Act The provincial government of British Columbia has proposed amendments to its Mines Act to sever responsibility for the permitting of mines in the province from the oversight, health, safety and enforcement responsibilities.
The proposed amendments will result in the creation of:. A new Chief Permitting Officer responsible for permitting decisions. The Chief Inspector of Mines will continue to be responsible for investigations and will be granted new powers of investigation, specifically powers to investigate where there is potential for serious injury, loss of life or property, or environmental damage. An Audit Unit headed by a Chief Auditor who will focus on compliance and enforcement.
The limitation period for commencing a prosecution under the Mines Act will also be extended from three to five years. These changes are important as British Columbia is a prominent mining jurisdiction in Canada. It is hoped these amendments will lead to permitting efficiencies and more timely decision-making for proponents while serving to institute proactive safety mechanisms to avoid environmental disasters, particularly as they relate to tailing storage facilities in the province.
Flow-through shares A common form of financing for mining companies in Canada is the issuance of flow-through shares see Question Flow-through shares are common shares, generally issued at a premium to provide a Canadian investor with certain tax benefits provided the mining company makes certain expenditures within a prescribed period of time and ultimately renounces such expenditures to the Canadian investor.
Anticipated amendments to the federal flow-through share programme will extend the time period for issuers to incur the necessary expenditures. The amendments aim to provide relief to mining companies in light of the novel coronavirus disease COVID pandemic. Other developments Other potential changes include:. Most provinces and territories shifting to electronic online staking.
The prospect of a new mining legislative and regulatory regime in the future for Nunavut if the Nunavut and Federal Parliament successfully negotiate and implement the devolution of administration and control of lands and resources. An agreement in principle in this regard was reached in Regulatory structure Regulation.
What is the regulatory framework for the exploration and extraction of mineral resources? Regulatory framework Canada is a federalist state with powers and responsibilities constitutionally allocated between the Federal Parliament and the country's ten provincial legislatures.
The provincial legislatures principally regulate the exploration and extraction of mineral resources in the province. They do so through the ownership, administration and control of public lands and minerals, and legislative jurisdiction over natural resources. However, any mining project is also likely to be subject to applicable federal laws including laws with respect to the environment, imports and exports, and Indigenous peoples.
The provincial jurisdiction over the exploration and extraction of mineral resources has resulted in comprehensive mining regimes that are generally consistent across all ten provinces. These regimes are reflected in statutes dealing with the exploration of minerals and the claiming of mineral title, mine development and operation, environmental protection and reclamation. The provinces also enact laws with respect to mineral taxes and the transport of minerals within the province.
Canada's Federal Parliament enacts laws with respect to minerals and mining on federal land. Through the federal jurisdiction over Indigenous peoples and Indigenous reserve lands, fisheries and the discharge of effluence into fish-bearing waters, the federal government exercises significant control over mine development.
Therefore, any mine application generally results in a federal environmental assessment under applicable federal legislation. Canada's territories are under federal jurisdiction and are governed by three territorial governments created by statute by the federal government. Mineral rights in the Yukon and the Northwest Territories are regulated by the respective territorial governments through statutory devolution by the Federal Parliament.
Mineral rights in Nunavut remain regulated by federal law. Regulatory authorities Each of the ten provinces, three territories and the federal government have their own regulatory bodies to administer and oversee mining activity.
Within each such jurisdiction, mining activity is subject to a variety of legislation and regulation covering different aspects of mineral rights, environmental standards, workplace standards and other matters. For example:. Applicable legislation and regulation in British Columbia includes the:. Mineral Tenure Act;. A facility operator is defined as a company registered with the SEC which may or may not be the project proponent, and which is responsible for all aspects of operation and maintenance of the infrastructure or development facility, including but not limited to the collection of tolls, fees, rentals or charges from facility users.
Build-Lease-Transfer BLT : a project proponent is authorised to finance and construct an infrastructure or development facility and on its completion turns it over to the government agency or local government unit concerned on a lease arrangement for a fixed period after which ownership of the facility is automatically transferred to the government agency or local government unit concerned. Build-Transfer-and-Operate BTO : the public sector contracts out the building of an infrastructure facility to a private entity such that the contractor builds the facility on a turn-key basis, assuming cost overrun, delay, and specified performance risks.
Once the facility is commissioned satisfactorily, title is transferred to the implementing agency. The private entity however, operates the facility on behalf of the implement agency under an agreement. Contract-Add-and-Operate CAO : the project proponent adds to an existing infrastructure facility which it is renting from the government.
It operates the expanded project over an agreed franchise period. There may be a transfer arrangement in regard to the facility. Develop-Operate-and-Transfer DOT : the favourable conditions external to a new infrastructure project which is to be built by a private project proponent are integrated into the arrangement by giving that entity the right to develop adjoining property, and thus, enjoy some of the benefits the investment creates such as higher property or rent values.
Rehabilitate-Operate-and-Transfer ROT : an existing facility is [ transferred] to a private sector to refurbish, operate and maintain for a franchise period, at the expiry of which the legal title to the facility is [ transferred back] to the government. The term is also used to described the purchase of an existing facility from abroad, importing, refurbishing, erecting and consuming it within the host country. Rehabilitate-Own-and-Operate ROO : an existing facility is turned over to the private sector to refurbish and operate with no time limit imposed on ownership.
As long as the operator is not in violation of its franchise, it can continue to operate the facility in perpetuity. Non-competition and anti-trust clauses. Are there statutory constraints on the use of non-competition or anti-trust clauses in a JV agreement? During period of effectiveness A non-competition clause to be effective during the JV can be included in the JV agreement between the parties.
Following termination A non-competition clause that is to be effective on the termination of the JV must be valid, provided that it does not constitute an unreasonable restraint of trade.
Jurisprudence holds that a non-competition clause is reasonable if it sets a limitation on the particular type, time and place of the business activity being restrained.
The Supreme Court has ruled that a corporate entity formed must be a JV rather than a corporation to be governed by the laws on partnership. Requiring a vote of seven out of nine directors in certain enumerated corporate acts. Designating a member of the Executive Committee and requiring a vote of this member for certain transactions. Using the word "designated" and not "nominated" or "elected" in describing the selection of members of the board of directors.
Referring to the entity as a "joint venture" rather than a corporation. Providing for a fixed number of directors on the board.
In another case, the Supreme Court held that a "consortium" is not a JV when there is no community of interest, a sharing of risks, profits, or losses, or even a representation from the members of the consortium that they have come together to form such consortium.
In that case, there was no JV agreement or similar instrument executed by the parties to the consortium. The only documentary evidence adduced to prove the existence of a JV was a statement of one party that it represented the consortium but this was not supported by a declaration from the other parties that they authorise the other to bind them Information Technology Foundation of the Philippines v Commission on Elections GR No. In Kilosbayan In. The court concluded this way because the power of attorney in fact established a common fund and a joint interest in the profits of the business by way of a sharing in the income of the subject mining project.
Limiting member liability. Can a JV agreement provide that a JV member can participate without incurring any risk, loss or reward? The co-venturers can agree on the share of each party to the capital, profits, or losses of the JV. However, as far as third parties are concerned, all partners are jointly and severally liable with the partnership for everything chargeable to the partnership, including loss or injury caused to a third person, or penalties incurred due to any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of their co-partners J Tiosejo Investment v Ang GR No.
Do any anti-trust rules, guidelines or policies apply to a JV agreement? Technology transfer arrangements must not contain any clauses that Intellectual Property Code of the Philippines, section 87 :. Impose on the licensee the obligation to acquire from a specific source capital goods, intermediate products, raw materials, and other technologies, or of employing personnel indicated by the licensor. Allow the licensor reserves the right to fix the sale or resale prices of the products manufactured on the basis of the licence.
Contain restrictions regarding the volume and structure of production. Prohibit the use of competitive technologies in a non-exclusive technology transfer arrangement.
Establish a full or partial purchase option in favour of the licensor. Obligate the licensee to transfer for free to the licensor the inventions or improvements that can be obtained through the use of the licensed technology. Require payment of royalties to the owners of patents for patents which are not used. Restrict the use of the technology supplied after the expiration of technology transfer arrangement, except in cases of early termination of the technology transfer arrangement due to reason s attributable to the licensee.
Require payments for patents and other industrial property rights after the expiration or termination of the technology transfer arrangement. Require that the technology recipient does not contest the validity of any patents of the technology supplier. Restrict the research and development activities of the licensee designed to absorb and adapt the transferred technology to local conditions or to initiate research and development programs in connection with new products, processes or equipment.
Prevent the licensee from adapting the imported technology to local conditions, or introducing innovation to it, as long as it does not impair the quality standards prescribed by the licensor. Governance and limits on directors. Can the parties to a JV freely regulate the JV or are they subject to certain restrictions?
Since the JV is essentially a contract, the law allows the contracting parties such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. Other than contract law, partnership laws govern the relations between the parties in the absence of any specific provision in the JV agreement. In a corporate JV, the Corporation Code requires the affirmative vote of at least two thirds of the outstanding capital stock at a meeting duly called for the following purposes:.
Amendment of articles of incorporation. Extension or shortening the corporate term. Increase or decrease of the capital stock. Incurring, creating or increasing bonded indebtedness. Sale, lease, exchange, mortgage, pledge of all or substantially all the corporate assets. Investment of corporate funds in another corporation or for any purpose other than the primary purpose for which the corporation was organised.
Delegation to board of directors of the power to amend or repeal the bye-laws or adopt new bye-laws. Approval or amendment of a plan of merger or consolidation. The following acts require the vote of shareholders:. Election of directors. Adoption, amendment or repeal of bye-laws. Revocation of the power given to the board of directors to amend or repeal the bye-laws.
Justified by definite corporate expansion projects or programs approved by the board. Creditors' claims can only be held against the business itself, and shareholders can't be forced to cover the corporation's debts. A corporation can exist in perpetuity. That means, if someone who holds a place of importance in the business passes away or retires, the business continues to exist.
The corporation isn't dependent on the inclusion and presence of shareholders, directors, or officers because it exists as its own separate entity or person. The corporation's ability to exist in perpetuity provides an advantage when it's time to transfer ownership, which is done through shares.
Also, with its status as an independent entity, it's able to own property, enter contracts, and it can also be sued or file suit against others. Compared to other business forms, such as sole proprietorships or partnerships, corporations have more opportunities for capital acquisition.
Corporations are able to issue different classes of shares. They're able to offer other forms of debt instruments, like bonds, when they need to raise capital. The variety of offerings are often appealing to investors who prefer different types of stock.
For practical purposes, it is important that both parties are able to demonstrate the contract execution and to verify if the person on the other side is capable and duly empowered to do so. Click-wrap contracts may be characterised as adhesion contracts and, as such, must be worded clearly, and in legible print.
When entered with consumers, there are rules related to the format and display of text that may apply. According to the Brazilian Civil Code, the same means that were used for the execution of the agreement must be available for its termination. Are there any limitations or restrictions on transactions that can be concluded through electronic contracts? Some types of transaction cannot be completed through electronic contracts because the law requires specific formalities.
For instance, the acquisition of real estate or a will depends on the execution of a written public deed. There are no data retention requirements applicable specifically to electronic contracts under Brazilian law. There are data retention obligations applicable generally to internet application providers, in relation to the date time and internet protocol access of their platforms by users.
There are no special remedies available for the breach of electronic contracts. General contractual and civil laws will apply. Are electronic signatures legally valid in your jurisdiction? If so, what rules and restrictions govern their use? The Brazilian PKI is in charge of defining the rules and technical requirements that allow the offering of electronic certification services in Brazil.
Documents executed using certificates homologated by Brazilian PKI are presumed authentic and true, unless proved otherwise. Documents certified by other means, or simply not certified, are still valid, but not presumed authentic. This means that if their authenticity is challenged, an expert may have to be engaged to verify and attest it.
Are there any rules, restrictions or other relevant considerations regarding the use of electronic payment systems in your jurisdiction? The electronic payments industry has an important role in the Brazilian economy as the acceptance of electronic payment instruments increased significantly over the past decade. Both payment arrangements and payment agents became part of the Brazilian Payments System SPB, which includes all entities, systems and procedures for the processing and settlement of transactions involving fund transfer, foreign currencies, financial assets or securities and subject to oversight by the Central Bank, which is responsible for implementing the policies adopted by the Monetary Council CMN and issuing regulations in accordance with such policies.
As a result, the entire market of credit, debt and pre-paid cards became subject to the CMN and the Central Bank regulation and supervision. Until then, such market was not subject to any specific regulation. Payment agents, though, are not deemed to be financial institutions and are prohibited from engaging in activities that are exclusive to financial institutions eg, lending and deposit taking.
Following the enactment of the e-Payments Law, the CMN and the Central Bank adoped a set of rules on payment arrangements and payment agents, which became effective in May and encompasses, among other things:. Following discussions with market players and industry representatives, the Central Bank has been adjusting and improving the regulations over time, mainly to include operational and non-discriminatory tools to foster competition in the payments market.
The regulation was most recently updated in early This is because cryptocurrencies are not considered currencies in Brazil and are therefore not regulated by the Central Bank. They are considered as assets. Therefore, the transactions carried out in cryptocurrencies are subject to the general provisions of the Brazilian Civil Code.
For instance:. This treatment however is not applicable to any such assets that classify as a security under the Brazilian Securities Law which is similar to the US definition. What rules, restrictions and procedures govern the collection, use and storage of personal data in the course of digital business in your jurisdiction? As general obligations, Brazilian Law requires internet service providers ISPs, understood as companies that provide access to the internet and application service providers ASPs, understood as companies that offer internet-based applications to:.
What rules and restrictions apply to the cross-border transfer of personal data collected in the course of digital business? There are no specific rules in Brazil governing the international transfer of data.
Nevertheless, if such transfer occurs between distinct legal entities even if covered by a corporate bond or part of the same economic group , the data owner must consent to the transfer. Users have the following rights in relation to their personal data in the online environment:. Right to request ASPs to delete their personal data after termination of the agreement, except for data under the mandatory storage period;.
Right to inviolability of their private life, as well as to indemnification for damages arising out of violations thereof;. Right to clear and complete information on collection, treatment and protections of their personal data; and.
Right to not have their personal data shared with third parties without their free, express and informed consent. In addition, consumer law provides that consumers shall have access to any credit information on record, cards and registers, and personal and consumer data filed regarding them, as well as to demand immediate correction of inaccurate information, which shall be implemented and communicated by the supplier within five business days.
There is no specific regulation about the use of cookies in Brazil. Are they subject to any notification requirements in the event of a data breach?
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