Proposal to make consequential administrative amendments to several regulations under the Mining Act

Introduction

The Ministry of Mines is proposing to develop and enact consequential regulatory amendments, to give the proposed legislative changes through Bill 71 full effect and allow them to be brought into force. The proposed regulatory amendments also support the implementation of the Critical Minerals Strategy.

The proposed regulatory changes covered in this proposal relate to closure planning, and include:

• the creation of a procedure that mining companies (“proponents”) can request an order from the Minister providing for the conditional filing of a closure plan;
• an amendment to the process of providing financial assurance to allow proponents to submit financial assurance associated with their closure plan in phases to match the development/construction schedule of the site (“phased financial assurance”);
• as a result of the Bill, a series of consequential amendments to several regulations reflecting that,
  • the statutory role of the Director of Mine Rehabilitation would cease to exist.
  • additional instruments are being created may need to be prescribed under the Environmental Bill of Rights and the Ministry will need to update the associated instruments list.

The purpose of this posting is to gather public comment on these proposed changes.

Background

Under the Mining Act, proponents must prepare and submit to the Ministry of Mines a “closure plan” detailing how a proponent will rehabilitate the site following advanced exploration or mine production activities.

Currently, a closure plan must be submitted by the proponent, and filed by the Ministry with all required information before advanced exploration or mine production can begin. In many cases, some of these requirements are not relevant until much later in the mine development process when specific mine features are being constructed. There currently is no flexibility in the Mining Act that allows for a closure plan to be filed without the presence of all materials, regardless of when the features will be constructed. Given many early-stage closure plans are conceptual, forward-thinking plans for how to close out and rehabilitate a mine, it is not always practical to provide information for features that may never be constructed and for rehabilitation measures that cannot always be predicted far (sometimes decades) into the future.

If enacted, the Bill would amend the Mining Act to allow the Minister to issue an order, on request from a proponent, that allows the deferral of certain required elements of a closure plan, and may include terms and conditions determined by the Minister. This would be called a “conditional filing order”. The intent is to prevent the delay of mining projects where aspects such as studies or elements of a project / site features not planned for construction in the near term can reasonably be deferred without compromising the integrity of the closure plan. A mandatory term and condition is that the conditional filing order must specify a deadline for providing the deferred elements of the closure plan or closure plan amendment.

Closure plans must be accompanied by financial assurance in an amount equivalent to the costs of the rehabilitation measures specified in the closure plan. Financial assurance may be provided in the form of cash, letter of credit, surety bond, or any other form permitted by the Act. The purpose of financial assurance is to provide the Crown with the resources to rehabilitate a mine site if the proponent is unwilling or unable to do so. Financial assurance is at a cost to proponents, whether through costs of borrowing if they are providing cash, or as fees for things like letters of credit or surety bonds.

Similar to requirements identified above for studies and other requirements to be provided up front for items which will occur much later in the mine development schedule, the current process requires proponents provide financial assurance for all features identified in their closure plan before advanced exploration or mine development begins. This creates a significant financial burden to proponents and can impact the viability of some projects moving forward given that the construction of a mining project is both lengthy and costly, and this currently required process happens when there are no offsetting revenues for the proponent. Also, since closure plans evolve with the site, providing all the Financial Assurance up front is often unnecessary, as sometimes proposed features may never be constructed and associated rehabilitation costs never materialize.

If enacted, the Bill would amend the Mining Act to expressly provide authority for Ontario to accept financial assurance in phases, where approved by the Minister, as long as prescribed requirements are met. This proposed change aligns the timing of the submission of financial assurance to the actual construction schedule of the site, so that financial assurance is received when needed, but not before.

Requirements for Conditional Filing and Phased Financial Assurance

The Bill provides for the creation of regulations that will establish the requirements associated with a conditional filing order, as well as requirements for phased financial assurance.

The Ministry is proposing to make regulatory amendments that set out procedural requirements for these processes. These requirements are intended to give the Minister of Mines the information he or she needs to make these decisions.

Where these decisions would trigger the Crown’s duty to consult, Ontario will discharge its duty before the decision is made.

The proposed requirements are summarized below.

1) Procedural Requirements for Conditional Filing Order

The Ministry is proposing to require that requests for conditional filing orders be submitted to the Minister. This request could be submitted either prior to, or concurrent with, other steps in the submission process for a closure plan or closure plan amendment.

The goal is to require enough information for the Minister to make an informed decision about whether the request should be accepted, and if so, what the appropriate timeline for submission should be.

Proposed requirements could include:

• specifics of the required items that would not be included in the submitted closure plan or closure plan amendment;
• a proposed deadline for delivery; and
• identification of any environmental, health, or public safety implications that could derive from the absence of the required item at the time of submission, if such implications exist.

At the time a request is made, assessments would be made about potential implications of the request, including to the environment. Potential impacts, if any, can be mitigated through the inclusion of appropriate terms and conditions on any conditional filing order that is issued.

 2) Phased Financial Assurance

To support the recent legislative proposal which includes the provision for phased financial assurance under the Mining Act, the regulatory proposal would set the requirements for how phased financial assurance will work.

As a fundamental requirement, Ontario requires sufficient financial assurance for the rehabilitation of a given mine feature before that feature is created. Any phased schedule for the incremental delivery of financial assurance would need to follow this principle. This requirement is intended to mitigate the possibility of the province having insufficient financial resources available if needed to remediate a mine site.

The Ministry is also proposing to specify a process that proponents must follow in order to request the Minister’s approval for the phased delivery of financial assurance. This process would refer to schedules and costing charts already provided in closure plans as long as those elements of the closure plan have sufficient detail to support the Minister in making an informed decision.

If the proponent fails to comply with the required phasing, the Minister may require, in the prescribed manner, that the proponent promptly provide the outstanding financial assurance.  The Ministry is proposing to prescribe that the Minister do this in writing but is not considering other requirements at this time.

Compared to the status quo under the Mining Act and its regulations, environmental implications resulting from this regulation are neutral, as the same financial assurance for all required activities and tasks will still be required prior to the construction of mine features: the difference is that the financial assurance can be submitted incrementally as the features are developed, rather than all up-front at the commencement of the project.

Administrative Changes Related to Decision-Making

The Bill, if enacted, would remove the statutory role of Director of Mine Rehabilitation, and transfer its statutory authorities to the Minister. Consequential amendments to the Ontario regulations, including those listed below, are required to reflect this change:

• O. Reg. 240/00 Advanced exploration, mine development and closure under part vii of the act (Mining Act)
• O. Reg. 45/11 General (Mining Act)
• O. Reg. 242/08 General (Endangered Species Act)
• O. Reg. 349/98, Work permit - disruptive mineral exploration activities (Public Lands Act)

There is no anticipated environmental consequence based on this proposal.

Transitional Regulation

The Bill provides for transitional regulations to be made, which would allow the changes to the Mining Act to be implemented in an orderly fashion.

The Ministry is particularly focused on ensuring that the changes to closure plan filing requirements do not prejudice proponents who have already submitted closure plan amendments to the Ministry, or who have closure plans in draft status that have been submitted to the Ministry for advance review and comment.

The Ministry wishes to ensure that proponents who have invested time and resources in preparing compliant closure plans or closure plan amendments, but that have not seen these closure plans or amendments filed yet, are treated reasonably under the transitional regulation.

As this proposal is administrative in nature, there is no anticipated environmental consequence based on this proposal.