BC Supreme Court Finds $20,000 Mines Act Security Decision Unreasonable

• Published date: 04 November 2021
• Subject Matter: Environment, Government, Public Sector, Energy and Natural Resources, Environmental Law, Mining, Constitutional & Administrative Law, Indigenous Peoples
• Law Firm: Gowling WLG
• Author: Mr Josh Jantzi, Mark Youden, Maya Stano, Wally Braul and Emma Hobbs

The Supreme Court of British Columbia in Ignace v. British Columbia (Chief Inspector of Mines), 2021 BCSC 1989 recently considered and provided guidance on two important facets of mining projects:

1. the adequacy of financial security for mine reclamation and
2. the adequacy of Crown-Indigenous consultation at the final stages of the mine permit review process.

In its decision, the Court concluded that the Chief Inspector of Mine's decision was substantively unreasonable as it did not update the $20,000 reclamation security requirement (imposed 25 years earlier, in 1996), despite $27 million in recent anticipated reclamation costs. The Court also found that the Crown failed to adequately consult the Stk'emlupsemc Te Secwepemc Nation ("SSN") on potential adverse impacts of the Mines Act permit amendment on Indigenous rights and interests, and accordingly ordered the Crown to adequately consult to discharge its constitutional duty.

Background

In Ignace, the SSN applied for judicial review of a decision by the Chief Inspector of Mines to issue an amended permit to operate the McAbee Quarry located within the SSN's traditional territory in BC's southern interior. The SSN claim Aboriginal title and rights to the lands in and around the quarry.

Operations at the McAbee Quarry began in 1978. Today, the quarry is owned and operated by Canadian National Railway Company ("CNR"), who extracts ballast from it to maintain its railway lines. In 1996, the Province issued a permit for the quarry pursuant to the Mines Act, which required CNR to pay $20,000 to secure its obligation to reclaim the quarry. CNR purchased further land to expand the quarry in 2008, and in 2009 prepared a reclamation plan. The permit was later amended through Notices of Work ("NoW") in 2010 and 2012. Throughout this time, the permit condition providing for posting of security remained unchanged in the amount of $20,000.

In March 2017, CNR submitted another NoW (the "2017 NoW") for the McAbee Quarry. CNR's application disclosed material changes from prior NoW, including an estimated reclamation cost of $27 million. The 2017 NoW did not provide for progressive reclamation, although it referred to the 2009 reclamation plan that contemplated progressive reclamation to begin in 2020.

From 2017 to 2019, the Province consulted with the SSN on the potential adverse impacts of the 2017 NoW on its claimed Aboriginal title and rights. During consultation, SSN contended that the 2017 NoW could not be considered for approval until CNR entered into a formal agreement with the SSN which scope extended beyond activities at the McAbee Quarry. In 2019, CNR proposed certain impact benefits to SSN, which SSN rejected. Shortly thereafter, CNR wrote to the Chief Inspector asserting its understanding that the Ministry of Mines, Energy and Petroleum Resources ("MEMPR") had completed its consultation and that CNR had engaged as...