Existing and future land claims and doubts on environmental rules have added a layer of uncertainty to an already difficult environment in the Canadian mining and resource sector, as companies struggle for development cash in a nervous and unsettled market.
With oil prices sagging, and global capital markets looking askance at mining and resources, lawyers say both the Tsilhqot’in Nation v. British Columbia aboriginal land rights case, and the new recommendations and likely regulations after the Mount Polley tailings dam disaster are adding to the gloom.
“These developments, Tsilhqot’in and Mount Polley, have added to the considerations that investors consider when they are looking at investing in Canada,” says Paul Cassidy, a partner in the business law group at McCarthy Tétrault LLP in Vancouver. “Are they using these two factors as the tipping point to make or not make an investment decision? I think that’s too hard to say. The investors we deal with are much too sophisticated to rely on one mine incident or one court decision as a tipping point.”
The 2014 Tsilhqot’in Nation v. British Columbia case was the Supreme Court’s first declaration of aboriginal title, a ruling that the band holds title to land in the interior of British Columbia that it has used over generations. The decision has implications for provinces where First Nations have no treaties dealing with land use, including parts of Quebec and the Maritimes. But the biggest impact is being felt in resource-rich British Columbia, where other bands are now considering similar title claims.
“B.C. is looking like tough ground, I think that’s pretty clear to everybody,” says Brian Battison, vice president for corporate affairs at Taseko Mines, whose New Prosperity property lies close to the title lands designated in the Tsilhqot’in ruling and who includes Prosperity in a long list of costly B.C. resource projects that have run up against problems.
“If we are going to spend millions and millions of dollars [on development] we have to have some confidence that we’ve got a fighting chance that the process is going to be fair,” he says. “We look for laws and regulations that are clear and that we can understand, and we need to know what is required of us.”
Partly in response to the uncertainties caused by Tsilhqot’in, the Vancouver-based Fraser Institute nudged British Columbia down several notches in its annual assessment of the attractiveness of mining policies in jurisdictions around the globe, describing the region as the Canadian province with the most room for improvement.
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