Consult before exploring: mineral tenure and Indigenous rights

The resource sector has always been at the forefront of developments in Indigenous law. This past year has borne this out. In 2024, we have seen significant changes to mineral tenure in Canada in several prominent mining jurisdictions. A key decision in the courts of British Columbia, two constitutional challenges in Ontario and legislative changes on the horizon in Québec all foreshadow potential evolution in the approach to mineral tenure across the country.

With these developments in key mining jurisdictions in Canada, it is almost certain that the impact of Indigenous issues on mineral tenure will be felt in 2025 and beyond. Mineral tenure holders operating in these provinces should be mindful of these developments as they could meaningfully affect the rights associated with title and how mineral tenure is acquired and maintained. Such developments also highlight the desirability of proactively engaging with Indigenous communities that could be affected by the exercise of rights associated with mineral tenure.

We anticipate more collaboration between government and Indigenous communities to manage land that is available for mineral exploration and development in Canada.

Mineral tenure in Canada

Mineral tenure rules, which determine where mineral exploration and mining can occur, fall under provincial legislative jurisdiction. Even with separate provincial legislative oversight, tenure regimes are fairly consistent across Canada, though with some differences in terminology and local historical influences.

Mineral claims represent the initial tenure interest. They confer on the holder exclusive rights to conduct mineral exploration on the specified property with a view to finding an economic ore body. In most jurisdictions, mineral claims can now be staked online, rather than through the historic practice of putting stakes in the ground. Exploration work typically requires additional permits. However, in some jurisdictions, a claim holder can carry out preliminary exploration work in reliance on rights attaching to the claims without obtaining additional permits. 

Once a project becomes more advanced and extraction becomes a possibility, a claim holder will convert claims into a mining lease. Such a lease confers additional rights on the holder, including the right to mine.

Traditionally, Indigenous consultation has been linked to the permitting process, culminating in an impact benefit agreement with affected Indigenous communities at the time of granting a mining lease. However, with recent developments, this may soon change.

British Columbia, title and the Gitxaala decision

In British Columbia, the Mineral Tenure Act (British Columbia) (MTA) confers on mineral claim holders the exclusive right to explore for minerals. The claim holder is also authorized to undertake certain preliminary exploration activities without requiring further permits. 

On September 26, 2023, the British Columbia Supreme Court handed down its judgment in Gitxaala v. British Columbia (Chief Gold Commissioner). The Court held that the Province of British Columbia has a duty to consult Indigenous groups when registering mineral claims within their traditional territories pursuant to the MTA. The Court reasoned that the registration of the claim may adversely affect an Aboriginal claim or right, within the accepted legal test for triggering the duty to consult. In reaching this conclusion, the Court accepted the arguments made by the First Nations regarding the impact of registering the claim on places of cultural and spiritual significance, as well as the physical impacts associated with the loss of minerals, physical disturbance and loss of financial benefit from the minerals.

The Court granted a declaration that the province had breached its duty to consult. However, the Court suspended the implementation of the declaration for 18 months to facilitate the design of a mineral claims regime that allows for consultation or to provide the government with the time to amend the MTA, if necessary. Additional information regarding the decision is contained in our Osler Update.

In response to the decision, in March 2024, the British Columbia government launched a stakeholder consultation aimed at potential reforms to the MTA. The government also issued protective orders restricting mineral claim registrations and mining activities in the territories of the Gitxaala Nation and Ehattesaht First Nation. Neither the results of the consultation nor any further progress towards legislating a response to the Gitxaala decision have been announced.

It is not clear what comes next. British Columbia has just concluded a tightly contested election that could impact legislative priorities going forward. Meanwhile, the clock is ticking on the suspension of the Court’s declaration, which expires in March 2025. 

Ontario First Nations constitutional challenges

In Ontario, two actions were launched in 2024 challenging the constitutionality of the Mining Act (Ontario) (Ontario Act). On July 10, 2024, the Grassy Narrows First Nation brought an action on similar grounds to those advanced in Gitxaala. However, unlike the MTA, the Ontario Act expressly incorporates Indigenous rights. As a result, the primary rights associated with mining claims, the right to conduct mineral exploration, are expressly subject to prescribed Aboriginal consultation. The Ontario claim staking system also notifies mineral claim holders of First Nations land claims as part of the staking process.

We discuss the action brought by the Grassy Narrows First Nation in our Osler Update. Briefly, the action alleges that the registration of mining claims and performance of assessment activities that a holder of a mining claim is to conduct have the potential to cause adverse impacts on the rights of the Grassy Narrows First Nation. As such, they assert a duty to consult prior to the granting of new mining claims. 

Shortly afterward, on August 9, 2024, six other First Nations together brought another action challenging the Ontario Act. The action raised additional arguments of potential adverse impacts to Indigenous rights from the awarding of mining claims, despite the express statutory requirements in Ontario to engage in Aboriginal consultation. The First Nations are focusing on automatic registration of mining claims through the online staking system, the inability of First Nations to remove lands from mining activity and the formulaic manner in which notices of First Nations’ claims are sent to claim holders. The action alleges these provisions to be contrary to constitutional consultation rights. The second Ontario application also cited the refusal of Ontario to delegate its duty of consultation to project proponents as a further violation of consultation rights.

Pending Québec legislative review of title

The Government of Québec has recently announced a proposal to review its mineral title regime.  In May 2024, the Québec government introduced Bill 63, which would amend the Mining Act (Quebec). Some of the proposed amendments would permit Québec to exempt certain lands from mineral exploration and development. The changes would also allow the government to enter into agreements with Indigenous communities to manage resource development in non-exempt lands. 

The path forward for tenure in Canada

All of these developments come at a time when Canada is looking to promote new mine development as part of a focus on critical minerals and energy transition. (Additional details regarding critical minerals are included in our Osler Legal Outlook article). Uncertainty with respect to mineral tenure is unlikely to help these initiatives. It will be interesting to see how these issues unfold in various jurisdictions over the coming months.

There are some trends we expect to see during 2025 and beyond. 

First, there will likely be further direct involvement and ownership by Indigenous communities in mining projects at all stages of development. In an historic first, in September 2024, the Selkirk First Nation acquired ownership of the Minto Mine in the Yukon. The initiative of the Nisga’a First Nation to launch a publicly traded royalty company is also noteworthy in creating different channels for Indigenous investment in mining projects. 

Second, we anticipate more collaboration between government and Indigenous communities to manage land that is available for mineral exploration and development in Canada, including direct co-management of Crown lands and resource use. This trend follows, particularly, the Yahey decision in British Columbia and the subsequent implementation agreement between the Province of British Columbia and the Blueberry River First Nation. We discuss certain of these developments in our Osler Update. Co-management potentially avoids situations where early-stage projects are stalled due to community issues — a situation not in the best interests of mining companies, local communities or government. 

Finally, in what might constitute the most significant shift in the mining industry, we expect to see a pivot towards direct engagement between project proponents and Indigenous communities without the participation of government or the backdrop of a permitting process. This shift could result in a more pragmatic approach that separates project development from constitutional rights, which, in turn, could assist in streamlining the permitting process.

All of these trends should contribute to form a path towards greater certainty for mining development in Canada when we need it most.