Quebec Bill 14 a blow to mineral industry – by Marilyn Scales (Canadian Mining Journal – December 6, 2011)

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

The Quebec government has introduced Bill 14 that will give local communities rather than the province the right to control where and when mineral exploration and development takes place. It has the Quebec Mineral Exploration Association (AEMQ) up in arms, and with good cause.

In the words of the AEMQ, the bill is appalling and the government is abandoning its fiduciary responsibility to manage mineral resources. Bill 14 gives that responsibility individually to 1,200 local entities, making the administration of Quebec mineral resources “messy” and “incoherent”.

“By giving municipalities the option to reject exploration activities, the government of Quebec is setting up an environment of unprecedented instability within Quebec’s mineral business sector. In spite of a favourable global environment and high metal prices, once adopted, Bill 14 will instil doubt on the stability and predictability of our mining system”, said AEMQ president Jean-Marc Lulin. 

Valérie Fillion, AEMQ executive director, added, “The state, municipalities, exploration and mining companies could come into permanent conflict. There is a huge risk of seeing mineral rights become a judicial issue. This will considerably weaken Quebec’s attractiveness and competitiveness.”
If Bill 14 is passed, PricewaterhouseCoopers will probably drop Quebec far down its list of “mining friendly” jurisdictions.

Part of the problem with the bill is that it threatens many of the industry’s vested interests by retroactively applying exemption provisions. Although the government argues that acquired rights will be respected and damages compensated, the AEMQ disagrees. Amendments to the bill intended to address this issue provide only small compensation amounts. The association pointed out that compensation will not cover project acquisition costs, financial and legal provisions between partners, or loss of project value including work done to outline resources and reserves.

Today’s red tape is bad enough when miners must deal with both the federal and provincial or territorial governments to win project approval. The best outcome with the passage of Bill 14 would be simply another layer of bureaucracy. The worst case, and it could easily happen because exploration projects can cover large areas, is that the federal, provincial or territorial, and dozens of local governments with differing priorities will wade into the approval process.

Add to that the retroactive nature of Bill 14, and Quebec is about to create an impossible situation for sustainable development.

Many questions remain unanswered, among them: What constitutes a local entity? Are they individually free to address each exploration or development proposal as they see fit? Will the province give local entities guidelines to be followed? How will disagreements be settled?

The loss or downsizing of Quebec’s mineral industry will have a profound effect on the province. No matter how much the province tries to promote its Plan Nord, if the mineral industry cannot rely on a transparent set of rules in other areas, the plan will never fulfill its economic potential.