The silence is deafening

Where is British Columbia going with mineral tenure reform following the Gitxaala decision?

British Columbia’s mineral claims system is regulated under the “Mineral Tenure Act.” This act provides an electronic online registration system that allows the grant of mineral claims to “free miners.” The free miners can then acquire mineral claims by using the province’s “Mineral Titles Online Registry” to select cells on a map and pay a fee to obtain a claim.

Ever since the Yukon Court of Appeal’s 2013 decision in “Ross River Dena Council versus the government of Yukon, 2012 YKCA 14,” there has been debate about whether the B.C. mineral claims staking regime comported with the Crown’s duty to consult Indigenous groups.

That question has now been answered by Justice Ross of the B.C. Supreme Court, who concluded in “Gitxaala versus British Columbia (Chief Gold Commissioner), 2023 BCSC 1680,” that B.C.’s existing mineral staking regime was not consistent with the Crown’s duty to consult.

Justice Ross’ lengthy ruling can be summarized as follows:

• A duty to consult is triggered by B.C.’s mineral tenure staking system because it causes adverse impact on areas of significant cultural and spiritual importance to First Nations and the rights of First Nations to derive financial benefit from the minerals within their claimed territories.
• The Chief Gold Commissioner has the discretion to create a new structure for staking mineral claims that incorporates consultation with First Nations.
• The United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) and the subsequent Declaration on the Rights of Indigenous Peoples Act (DRIPA) do not have the effect of implementing UNDRIP as law, and DRIPA does not create an ability to take the government to court if any other laws are inconsistent with UNDRIP.

The province elected not to appeal the ruling.

Given the obvious consequences of the decision, the court suspended its declaration by 18 months to give B.C. government time to “allow the design and implementation of a program of consultation,” noting presciently, “I do not know what that program will look like, but it will not happen tomorrow.”

The court also appeared alive to the fact that any workable system will need to be developed in consultation with all interested parties – not in a backroom. Justice Ross concluded his judgment by noting the importance of negotiation and emphasizing that the province, First Nations, and the mineral exploration industry are all here to stay.

The purpose of this article is to assess the status of the government’s related engagements with affected parties, and to discuss some of the important issues that will have to be considered – many of which are not obvious from a reading of the Mineral Tenure Act or the Gitxaala decision. While important to any party planning mineral exploration in B.C., the decision also has the potential to affect the mineral tenure regimes in other provinces as well, if and as related litigation is brought forward.

Mineral tenure reform discussions prior to the Gitxaala decision

Any discussion of how to reform the mineral staking system post Gitxaala must be understood in the context of discussions that had already started well before the decision was rendered. More specifically, the province has been examining some form of mineral tenure review for some time, though little information has been made publicly available.

Nothing of relevance can be readily found on the B.C. ministry of energy, mines, and low carbon innovation website; however, government officials have referred to such an exercise. For example, in a recent decision rejecting one of our clients’ exploration permit applications, the statutory decision-maker wrote:

“I also acknowledge that there is opposition by… First Nations with the mineral tenure regime in B.C. The decisions and engagement process for any future tenure applications fall outside the scope of this decision.”

In January 2022, the B.C. First Energy and Mining Council issued a report titled, “Indigenous sovereignty: Consent for mining on Indigenous lands.” It contained numerous recommendations to government regarding reform of the mineral tenure regime. These included the following:

• Indigenous Governing Bodies (IGBs) should exercise statutory powers under the Mineral Tenure Act;
• Crown free miner certificates should only be issued with IGBs consent;
• Registration of a mineral or placer claim should only grant the right to explore for minerals;
• IGBs could develop and administer their own claim staking processes; and
• IGBs should restrict the use of surface rights, regardless of who holds a mineral or placer claim.

The Association for Mineral Exploration (AME) has a webpage titled, “Mineral Tenure Act modernization: What you need to know.” It was posted before the Gitxaala decision – though it appears it has been updated since. It discusses various issues, but it provides no specific insight as to what, if any, consultations the government was undertaking with AME on this reform exercise.

In the Gitxaala decision, the court noted that B.C. had submitted certain evidence regarding its prior efforts toward modernizing the mineral tenure regime, and that consultations were undertaken between 2017 and 2019. None of the evidence noted by the court appeared to go directly to the issue of consulting on the staking of claims, and the Court noted, “… the ministry decided to pause the process with the idea that the province would later incorporate the concepts into broader work being planned and undertaken pursuant to DRIPA.”

Mineral tenure reform discussions after the Gitxaala decision

If it is difficult to find information about the Mineral Tenure Act modernization discussion that pre-dated Gitxaala, it is even harder to find any information about engagements being undertaken after the decision.

The sole statement found from the minister of energy, mines, and low-carbon innovation notes only that efforts related to reform of the Mineral Tenure Act are building on the collaboration with First Nations, industry, and communities. But the announcement gave no particulars about any consultations undertaken or planned. It also noted the process would be with an eye to reconciliation and “most importantly” aligning the act with UNDRIP. But the Court did not order the government to change the process to align with UNDRIP; in fact, the court expressly ruled the UNDRIP is not the law of B.C. What the Court did order is for B.C. to amend its staking process to better comport with the Crown’s duty to consult. Remarkably, there was no mention of that in the minister’s statement.

Issues to be considered

While there can be no doubt that any reform of the mineral tenure regime will be complex, it is imperative that a fulsome and open dialogue takes place that involves all interested parties. Additionally, it is necessary to ensure that consideration is given to both legal and practical aspects of any changes to the claim staking system. Some of the key issues and questions that will need to be considered include the following (and there are surely many more than would come forward in a robust consultation):

1 Will large swaths of B.C. be closed to exploration entirely – either temporarily or permanently – based on planning level (i.e., not claim specific) consultations undertaken between Indigenous groups and government?

2 If a party seeks to register a claim and, during the Indigenous consultation process, another party seeks to do the same, will the first applicant receive priority even if its consultation process takes longer?

3 Will the Crown encourage companies to enter “staking agreements” with Indigenous groups, much like they presently encourage the use of exploration agreements? If so, will the absence of such an agreement have an adverse effect on the government’s willingness to conclude the duty to consult has been met in the absence of such an agreement?

4 If an Indigenous group is consulted in respect of a proposed claim staking, will it be told the name of the party seeking to stake the claim? And will it be required to keep the interest in those claims confidential from other parties?

5 Where a claim staking is proposed and is the subject of consultation, will other parties be able to file an application for a staking in the same area prior to the claim being registered? If so, will the consultation processes related to these staking applications be considered contemporaneously or consecutively? Will Indigenous groups be able to weigh one proposal against the other to determine which company is more prepared to accommodate their interests?

6 If a staking application is rejected on the basis that the Crown does not feel its duty to consult can be met in the circumstances, will the staking applicant have any opportunity to propose additional accommodation?

7 If a staking application is rejected on the basis that the Crown has determined it cannot register the claim consistent with its duty to consult (i.e., given the Supreme Court’s direction on “balancing of interests”), then will that area be foreclosed from staking by other parties? If so, for how long and under what circumstances might it again become available for potential staking?

8 Will future claims be registered “on conditions?” If so, what will the scope of those conditions be? Might they limit the type or extent of exploration and mining activity that could follow on those claims?

9 If the resulting reforms lead to certain designated areas where claim staking will be permitted, and certain areas where it will be restricted or prohibited, will compensation be available to third parties that have already invested in the restricted or prohibited area?

10 If during consultation an Indigenous group expresses a preference to see staking only by one or more companies that it has a special relationship with, will government consider this as some form of “accommodation” that could potentially reduce the likelihood any other applicant company would be allowed to stake the claim?

11 Where claims are consulted upon and then registered, would a subsequent transfer of those claims to another party require another consultation process before the government registers the transfer? If so, would this same principle apply to transfers undertaken as a realization on security (i.e., claims pledged as security) or pursuant to various types of agreement commonly used in the exploration industry (such as earn-in agreements)?

12 If or to the extent Indigenous groups are given decision-making authority in respect of claim staking (i.e., not just being consulted), what safeguards will exist to ensure decision-making comports with relevant administrative law principles (e.g., independence, conflict of interest) as well as any applicable anti-corruption legislation?

13 Will any post-consultation decisions related to staking (approve or reject) be made publicly available? If so, will they contain information about the economic benefits the proponent has shared with the Indigenous group?

14 Will First Nations be able to seek damages from the government for past infringement of rights (prior to the Gitxaala decision, or during the 18-month interim period during which the court suspended its order)?

The answers to these questions have the potential to significantly impact the course of exploration activity in B.C. going forward. More specifically, they can affect the cost, timing, and certainty associated with mineral claim staking. They also have the potential for important secondary effects, such as impacting the use of claims to secure financial obligations (for example to lenders). All these matters will surely be considered by investors who have considerable ability to decide where and whether to deploy exploration capital.

Having said that, the purpose of raising these questions is not to suggest the issues cannot be tackled – it is more that they must be tackled through a fulsome, open, and inclusive engagement. Unfortunately, the relative silence following the Gitxaala decision is rather troubling. One can only hope the government will have more to say and that more robust engagement will commence soon – particularly since the 18-month window that the court provided in Gitxaala is moving rather fast.

Robin Junger is counsel, Indigenous law, environment; Sasa Jarvis is a partner, capital markets and securities; Cory Kent is a partner, capital markets and securities; and Joan Young is a partner, litigation and dispute resolution at McMillan LLP.

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