Commentary: Understanding [Quebec’s] Bill 43 – by Pascal de Guise, Yaël Lachkar and Misha Benjamin (Northern Miner – September 4, 2013)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. 

Bill 43 is the third attempt to reform Quebec’s Mining Act in the last five years. The first two bills were tabled by the Liberal government, but were not passed. This latest bill (Bill 43), tabled by the minority Parti Québécois (PQ) government, would be a major overhaul of the Mining Act, and its importance should not be understated. The prices of metal are falling and mining investments are slowing around the world. At a time when Quebec’s reputation as a mining-friendly jurisdiction is being questioned and critics from all sides are calling for a reform, Bill 43 could have an adverse impact on mining investment in the province.

It is in this context that the government of Pauline Marois has proposed a PQ version of the Mining Act and an overhaul of the way in which mining royalties are collected. The plan, which was referred to during the election period as the “North for All” plan, is a remodelling of the Liberals’ Plan Nord.

During the election period and the following months, drastic measures were proposed by the Minister of Natural Resources, Martine Ouellet, which were heavily criticized on the fiscal front. At the time, the PQ was criticized for aggressively seeking to maxi¬mize royalties from ex¬ploiting natural resources, affecting the industry’s ability to properly function.

In the face of such criticism, the minority government rapidly reviewed and corrected its policy, which resulted in Bill 43, which was submitted to Parliament at the end of May 2013.

But the reaction caused by the initial proposals — coupled with the already existing regulatory uncertainty from the previous failed bills — made the mining industry uneasy. It responded by retrenching its position that the status quo should be maintained, and took on a much more suspicious view of any potential reforms.

In a global market with fierce competition to attract mining projects, mining companies have the luxury of operating in the legislative system which is most favourable to them. Up until 2011, Quebec had placed itself in an excellent position thanks to the regime it had in place. However, since then, Quebec’s position as the jurisdiction of choice for miners has tumbled.

In 2010, the Fraser Institute ranked Quebec as the top jurisdiction for mining companies. It has since fallen to number 11. Despite the increased regulatory hurdles, we believe that drop is more a reflection of the mining industry’s natural aversion to the regulatory uncertainty that has been prevailing in the province rather than opposition to the content of Bill 43 itself.
New proposals

Under Bill 43, mining companies would need to perform and submit feasibility studies before being granted a mining lease, including a study of the feasibility of processing the ore in Quebec. No leases would be granted until the lease has received a certificate of authorization from Environment Quebec and approval of the restoration and rehabilitation plan. A committee would need to be charged with follow-ups and maximizing economic spinoffs within 30 days of obtaining the lease. They have to keep this same committee until the complete execution of the works planned, in order to oversee the implementation of the restoration and rehabilitation plan.

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