On February 13, 2013, the Quebec government tabled a draft regulation (Draft Regulation) to amend the rules for financial guarantees set out in the Regulation respecting mineral substances other than petroleum, natural gas and brine (Regulation).
Under the Mining Act1(Act), land rehabilitation and restoration work for a mining site must be covered by a plan approved by the Minister. To ensure that the work is done, the Draft Regulation proposes to increase the required financial guarantee from 70% to 100% of the anticipated cost of carrying out the rehabilitation and restoration work – coverage comparable to that required for mining projects in Ontario.
This requirement is in line with the recommendation made by the Bureau d'audiences publiques sur l'environnement in its July 2009 hearing report on Osisko's Malartic gold deposit. It is also identical to the requirement included in Bill 14, tabled in 2011 by the previous government. It is worth recalling that Bill 14, after lengthy meetings of the committee charged with studying it, was not passed by the Quebec National Assembly before the second session of the 39th legislature was prorogued. Interestingly, the provision concerning the 100% financial guarantee had been supported by both the government of the time and the official opposition, i.e. the party forming the current government.
The Draft Regulation also provides for the filing of a land rehabilitation and restoration plan where the movement of unconsolidated deposits is equal to or greater than 1,000 m3, instead of the current 10,000 m3. In this case, and in the case where other exploration work contemplated in Section 108 is planned, the financial guarantee for the rehabilitation and restoration work must be paid before the exploration work is carried out.
The Draft Regulation requires every person who engages in mining operations in respect of mineral substances, operates a concentrator plant or engages in mining operations in respect of tailings to submit the required financial guarantee in three payments: the first payment, representing 50% of the total amount of the guarantee, would be due within 90 days following receipt of approval of the plan; the second and third payments, each representing 25% of the total amount of the guarantee, would be due on the anniversary of the date of approval of the plan. These provisions are almost identical in wording to the equivalent provisions proposed in Bill 14, which were approved at the clause-by-clause consideration stage.
The Draft Regulation takes away the option of submitting the financial guarantee in the form of a security or a guarantee policy issued in favour of the Government of Quebec by a third person, but leaves the other options—including an irrevocable letter of credit issued on behalf of the Government of Quebec by a bank, a savings and credit union or a trust company—unchanged.
According to the Draft Regulation, the change in financial guarantee coverage would not apply to a person whose land rehabilitation and restoration plan was approved before the date of coming into force of the Draft Regulation, until the plan was revised. However, a person engaging in mining operations in respect of mineral substances, operating a concentrator plant or engaging in mining operations in respect of tailings whose plan was approved before the date of coming into force of the Draft Regulation would be required to comply with the new payment rules, except in regard to the first payment, which would have to be submitted no later than one year after the date of coming into force of the Draft Regulation, instead of within 90 days of receipt of plan approval.
Please note that this Legal update pertains to a proposed regulation and not to a regulation that is currently in force. The Regulation to amend the Regulation respecting mineral substances other than petroleum, natural gas and brine may not be adopted by the Government of Quebec before the expiry of 45 days from its publication in the Gazette Officielle on February 13, 2013.
Footnotes
1 RSQ, c. M-13.1.
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