This major court case holds a silver lining for BC’s mining future

BC Court finds ‘duty to consult’ on mineral claims within Indigenous territories, opening the door to a new relationship with First Nations.

Mineral exploration. Photo from AME.

This week, the Supreme Court of Canada surprised Canadians by overturning the current federal government’s landmark Impact Assessment Act, ruling the legislation opponents called the “no more pipelines act” an unconstitutional breach of the rights of provinces.

In BC, another major court case recently overturned parts of the provincial government’s historic mining exploration legislation. It’s a ruling with big implications for the future of the mining industry in BC and its relationship with First Nations.

Let’s dive in.

What happened

The recent BC court decision was hailed by the Gitxaała Nation and Ehattesaht First Nation as “a massive victory,” with the BC Supreme Court ruling that the province's mining-permit system does not comply with the government's duty to consult Indigenous groups.

That legislation, the Mineral Tenure Act (MTA), contains a system called “free entry”. Under BC mining law, a “free miner” is someone who holds a valid free-miner certificate from the government. And the free miner can register a mining claim on Crown land.

Before 2004, mineral claims required physical staking and marking, on the ground. But then BC changed the system and adopted an online system for mineral-claims registration, automatically granting mineral claims to applicants who submitted a request through a government website.

For the Gitxaała and Ehattesaht, the problem is that an individual can get a free-miner certificate for $25 a year (a company for $500), allowing them to register a mineral claim with the click of a mouse over unclaimed Crown land without consulting the relevant First Nations on the territory.

Under this part of the MTA, a person or company then has the right to explore the area in question. While it doesn’t let them go ahead and build a mine, it lets them explore the area and reserve the right, as it were, to develop a mine pending more exploration work and further approvals. If enough valuable minerals are found, and the miner wishes to extract them commercially, the miner must then apply for further approvals and enter a more extensive regulatory process, including consultation with First Nations.

What was challenged in the BC Supreme Court by the Gitxaała and Ehattesaht was the lack of requirement for the free miner to consult with any Indigenous peoples whose territory includes the land in question.

BC Supreme Court Justice Alan Ross ruled that "Establishing an online system allowing automatic registration of mineral claims in their territories, without creating a system for consultation, breaches the obligations of the Crown. . . .

“The fault in the system lies, not in the granting of individual mineral claims, but in the higher-level decision making relating to the [Chief Gold Commissioner’s] discretion to consult with First Nations."

The judge added: “Applying the Haida Test, I find that a duty to consult is triggered by the current system of issuance of mineral claims because it causes adverse impacts upon:

  1. areas of significant cultural and spiritual importance to the petitioners; and
  2. the rights of the petitioners to own, and achieve the financial benefit from, the minerals within their asserted territories.”

A law team at Borden Ladner Gervais LLP pointed out: “Significantly, the Court considered the duty to consult to be triggered not just when the province believes there is an adverse impact. The situation must also ‘be viewed from an Indigenous perspective.’”

The Haida Test was set out in court decisions in 2004 on a Haida Nation challenge to the BC government's issuance of tree-licence, to a company, on land on which the Haida people claimed title.

Justice Ross also found that the duty to consult flows from Section 35 of the Canadian Constitution.

What it means

The case has a number of implications for mineral exploration in BC, its impact on the mining industry and decarbonization goals and also the evolving landscape of economic reconciliation with Indigenous peoples more broadly.

First, Justice Ross ruled that the obligations of the Chief Gold Commissioner to consult First Nations applies throughout BC, not just in the territories of the Gitxaała and Ehattesaht.

Lawyers at Gowling WLG said changes to the Mineral Tenure Act “may also have corresponding impacts on neighbouring jurisdictions, such as the Yukon, which are also currently reviewing their mineral tenure regimes.”

Our completely non-legal opinion is that beyond BC, other provinces also have online staking systems. While this ruling occurred in BC, where the province's Declaration on the Rights of Indigenous Peoples Act (DRIPA) influenced this decision, the logic of the ruling may also be taken up by future courts under federal UNDRIP legislation.

In other words, the mining industry should expect similar court cases in other provinces. While always important, companies should do what they can to improve their relationships with First Nations in their areas of operation or prospective operation.

As previous speakers have said at our Indigenous Partnerships Success Showcase, dialogue should start at the very beginning of a project’s inception. While only a best practice now, it may be law before long.

Second (and more immediately), Justice Ross’s ruling does not impact or overturn existing mineral claims.

As he said: “I am making no finding and no order that affects the validity of existing mineral claims. In other words, all mineral claims registered under the existing system are valid.”

That’s good news for British Columbians who benefit from the jobs, tax revenue and GDP contributions of the provincial mining industry, and for decarbonization goals in BC and Canada, where minerals and metals will be key to electrification hopes across the economy.

This aspect of Justice Ross’s ruling provides for necessary certainty to the industry while simultaneously requiring the province, industry and First Nations to work together on a new and improved system.

Third, Justice Ross gave the government 18 months to replace the current system.

“The goal is to develop a mineral tenure system that recognizes the rights of BC’s Indigenous people. My hope is that that goal can be achieved in the 18 months I have set aside for that purpose,” he said.

Fourth, Justice Ross found that BC’s DRIPA legislation from 2019 did not technically enshrine the UNDRIP in the province's legal system.

“Instead,” wrote Justice Ross, “DRIPA contemplates a process wherein the province, ‘in consultation and cooperation with the Indigenous peoples in British Columbia,’ will prepare, and then carry out, an action plan to address the objectives of UNDRIP.”

Accordingly, while DRIPA does not implement UNDRIP into the domestic law of BC, “I have used DRIPA as an interpretive aid in addressing the proper reading of the MTA,” (italics added).

We’ll leave it to the legal experts to comment on what the application of Justice Ross’ ruling means for the future of natural-resource development under DRIPA in BC, but it goes without saying that it has significant implications not only for mining exploration but for every industry.

What’s next

The Association for Mineral Exploration (AME) said the 18 months provided by Justice Ross allows for long-overdue modernization of the province's Mineral Tenure Act.

AME president Keerit Jutla said AME is "actively engaging with key stakeholders and the BC Ministry of Energy, Mines and Low Carbon Innovation with a goal to ensure the mineral claim staking process remains competitive and efficient while respectful of the rights of Indigenous Peoples.”

The BC government has an opportunity to achieve a win-win-win with MTA modernization. With the need for critical minerals only growing as the world attempts to electrify, the need to ensure a new claim-staking process remains competitive and efficient is essential. Also essential is the need to move away from a distant or adversarial relationship with First Nations governments, even in this earliest of stages.

Whatever emerges, the goal should be to facilitate an environment where openness and dialogue can lead to partnerships between companies and Indigenous governments.

As Jutla said, "We know there is an opportunity for a more inclusive process that provides shared benefit as we unlock the minerals and metals necessary for a low-carbon future."

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