This response is made in accordance with section 22 of the Auditor General Act which provides for petitions concerning environmental matters in the context of sustainable development. A Petition received from Mr. Kevin O'Reilly and Mr. Nigel Bankes, officers of the Canadian Arctic Resources Committee (CARC), dated April 15, 1997 is chiefly concerned with how the mineral disposition regime in the Northwest Territories (N.W.T.) complies with the federal policy on sustainable development.

The response is organized in the following manner. The Background section briefly describes the context in respect to other legislation in which the Canada Mining Regulations operate in the N.W.T. The next section, Substance of the Petition, notes both the main argument made by the petitioners and the definition of sustainable development found in the Auditor General Act. This is followed by the section Response to the Substance of the Petition. In this section the response looks at how DIAND disposes of mineral rights in the N.W.T. in the context of the definition of sustainable development found in the Auditor General Act. Particulars of the Petition is the final section of the main body of the response. In it, response is made to a number of general assertions made in the Petition as well as the eight elements of sustainable development found in the Auditor General Act. The Appendix, The Main Acts and Regulations Governing the Mining Sequence in the Northwest Territories, provides support to the government’s position that the mining regime in the N.W.T. is adequately regulated from beginning to end in a manner consistent with the principles of sustainable development.

BACKGROUND

The procedure for acquiring Crown mineral rights are set out in the Canada Mining Regulations made under the Territorial Lands Act. The Canada Mining Regulations do not operate in a vacuum. Activities authorized by these regulations are subject to all other federal and territorial legislation and federal policies (details provided in the Appendix). In particular, the Canada Mining Regulations neither exempts any activity from any environmental management legislation nor from compliance with sustainable development legislation or policy.

Similarly, although the eight elements listed in the Auditor General Act (for the full list, see next section) through which sustainable development may be achieved, are not mentioned in the Canada Mining Regulations themselves, they are considered when regulations are amended.

SUBSTANCE OF THE PETITION

The substance of the Petition, in the words of the petitioners, is:

The definition of Sustainable Development contained in the Auditor General Act is:

The Auditor General Act expands on the description of sustainable development by describing it as a continually evolving concept based on the integration of social, economic and environmental concerns. The Auditor General Act states that sustainable development may be achieved by, among other things:

These eight methods by which sustainable development may be achieved are used as headings in the particulars of the petition.

RESPONSE TO THE SUBSTANCE OF THE PETITION

The licenced staking of mineral claims is among the least intrusive of all mining activities and causes relatively little disturbance to the land. The effects of this activity are not very different from those of many unlicenced uses of Crown land such as hunting, fishing, hiking and eco-system assessment.

Following the licenced staking of mineral claims the environmental impacts of additional exploration activities will lead to environmental screening of virtually all phases of exploration over certain minimal thresholds. A description of these processes are set out in the Appendix. This issue is many faceted and will be responded to in detail with the comments on particulars raised by the Petition.

The Auditor General Act requires all federal Ministers of Category 1 departments, as defined by the Financial Administration Act, including the Minister of DIAND, insure that a Sustainable Development Strategy is developed for their departments and tabled in Parliament by December 1997. At the same time as this process is underway, a major change is taking place to the system of resource management in the N.W.T. The settlement of land claims with First Nations and other Aboriginal groups requires new legislation. It creates new models for public government to make land use plans and to manage natural resources in a way which will guarantee participation of local residents in management decisions. The new legislation is being designed with sustainable development as one of its cornerstones.

PARTICULARS OF THE PETITION

Under the heading "Particulars of Petition" the petitioners assert that the Canada Mining Regulations provide for grants of Crown mineral rights. The term "grant" when used in relation to Crown land, normally means a grant in fee simple, which means permanent ownership of an interest in land. This has not been the practice, in nearly all of Canada, for over 50 years, and the N.W.T. is no exception. The highest level of right to land that can be acquired under the regulations is a lease. A more accurate statement of how mineral rights are disposed of under the Canada Mining Regulations is: a licenced claim staking system where only a licensee may acquire mineral rights for exploration and development. If the exploration and development are successful, a mineral lease is required to mine any economically viable minerals deposits that are found, subject to compliance with all legislation.

The petitioners state that the "The CMRs establish what is known as an open access or free-entry mining regime". This is not strictly the case. There are considered to be three elements to a free entry regime: "the right to enter lands in pursuit of Crown minerals, the right to obtain a claim, and the right to go to lease and produce". In the N.W.T., the right to enter lands in pursuit of Crown minerals is restricted by the requirement for a Prospectors’ Licence under the Canada Mining Regulations. The right is further restricted, once certain threshold activities are initiated, by the requirement for a Land Use Permit. The right to obtain a claim is restricted on certain lands and finally, the right to produce is regulated and restricted by federal and territorial legislation.

The petitioners further state that "Under an open access regime all Crown lands are open for mineral operations unless they are specifically withdrawn." This fails to acknowledge that, in addition to lands which may be withdrawn from time to time, certain classes of land, such as National Parks and burial sites, are not available for disposition under the Canada Mining Regulations and lands with occupied surfaces require prior approval.

The petitioners further state that "There is no requirement that government consult Aboriginal peoples or other land users (i.e. outfitters, forestry operators) prior to opening lands for mineral exploration". This statement is true insofar as no consultation is required on rights issuance; however, consultation would be done for example, if a land use permit is required. It should also be noted that, although there is no requirement, it is now the practice of DIAND to consult before issuing prospecting permits which grant exclusive rights to stake claims in specified areas.

The following description of the legislative framework under which the mining industry operates will provide a setting for how the activities described in the Appendix are regulated.

The Territorial Lands Act provides for the disposition, use and protection of federal Crown lands under the administration of the Minister of DIAND. The purpose of the Canada Mining Regulations is to dispose of subsurface rights. However, a variety of other regulations exist pursuant to this Act. The Territorial Land Use Regulations govern the temporary use of the surface through the issuance of land use permits for activities such as trail construction, fuel storage use and camp facilities for exploration on Crown lands (where no surface rights have been granted). Land Use Permits issued by DIAND on Crown lands prescribe the operating conditions. The Territorial Lands Regulations dispose of surface rights where permanent structures and long term occupation of the land is requested. The surface lease also provides for exclusive use of land which, at some work sites, may be necessary for public safety. Exploration may be carried out prior to mineral rights acquisition, only by holders of a prospecting licence and, only in accordance with paragraphs 8(4)(a) and (b) of the Canada Mining Regulations:

8(4) No person other than a licensee, shall

All applications for land use permits and leases are subject to an environmental screening pursuant to the Canadian Environmental Assessment Act and the Nunavut Land Claim Agreement. The screening determines if the project is likely to cause significant adverse environmental effects, taking into account appropriate mitigation measures, or if there is public concern. If it is determined that there is uncertainty regarding the likelihood of significant adverse environmental effects, or significant adverse effects are likely but may be justifiable, or where public concerns warrant a reference to a mediator or a review panel. the project will be referred to either a mediator or a review panel.

An operational plan and safety plan are required by GNWT’s Mines Safety Section, before any blasting, diamond drilling or mechanical trenching may commence. In addition, a permit to burn is required under the Forest Protection Act (GNWT) for outdoor fires. The Territorial Labour Standards Act and Regulations state working conditions for non-governmental employees. Requirements for sanitation in field camps are governed by

the Public Health Act (GNWT). Flights in areas of wildlife concentrations are restricted to above 500 metres above ground level, 3000 metres in goose staging areas, and raptor nesting areas. Bird colonies and migration staging areas are to be avoided. Land use activities may be suspended in some areas at certain times of year during calving season under the Caribou Protection Measures. Exploration in Migratory Bird Sanctuaries requires a permit from the Canadian Wildlife Service and must not disturb the birds or nests.

In summary, all activities on a mineral claim must be in accordance with environmental legislation, such as the Territorial Land Use Regulations, the Northwest Territories Waters Act, the Canadian Environmental Assessment Act, the Fisheries Act and approved land claims. Integration of the environment and economy is accomplished within the entire regulatory framework governing mineral exploration and development.

The perception of widespread land use conflicts may come from the large amounts of land staked by mining companies. Prospectors and other mineral explorers need access to large areas for exploration but not all the land that they stake is necessarily explored, and less than 1 percent of the land explored has the potential for mining. The problem and the dilemma for land use planning is that no one knows which 1 percent will be suitable for development. Most early exploration is benign, regulatory controls are becoming more stringent and, at the same time, exploration technologies get better and less intrusive.

The Petition contains comments on each of the eight means, listed in section 21.1 of the Auditor General Act, by which sustainable development may be achieved. This is not a list of features that must be included in each piece of legislation, but the department is establishing the list of principles, such as those, to guide DIAND’s sustainable development strategy.

The following responds to each of those comments.

When amendments to regulations are published for public comment, they are accompanied by a Regulatory Impact Analysis Statement (RIAS). Most recently, on

December 14, 1996, some minor amendments such as revising the forms in the Canada Mining Regulations were published in the Canada Gazette. The Regulatory Impact Analysis Statement (RIAS) contained the following statement:

"These amendments do not have any environmental effect. The Canada Mining Regulations are subject to all environmental legislation currently in place."

As stated in the RIAS, the Canada Mining Regulations are designed to operate in conjunction with territorial and other federal legislation protecting the environment.

The next statement, in the Petition deals with two new topics.

The phrase "...simply given away to the first comer" is not a full description of the requirements to hold a licence. A mineral right may be retained only as long as the holder of the mineral right submits proof that he or she has actively evaluated the mineral potential of the claim. Only rarely does this individual effort lead to the discovery of a valuable mineral deposit and each stage of this effort and any development proposal is subject to thorough environmental screening.

To examine how DIAND is addressing the integration of the environment and economy, one has to look beyond the Canada Mining Regulations. As noted in the Petition, the Canada Mining Regulations are the regime for granting third parties limited rights to Crown owned minerals in the N.W.T. The regulations deal almost exclusively with how to acquire and maintain mineral rights. There is one environmental provision in the regulations namely section 73. The Canada Mining Regulations state in subsection 73(2) that:

As stated above, this means that all activities on a mineral claim must be in accordance with environmental legislation such as the Territorial Land Use Regulations, the Northwest Territories Waters Act, the Canadian Environmental Protection Act, the Canadian Environmental Assessment Act, the Fisheries Act and settled land claims. Integration of the environment and economy is accomplished within the entire regulatory framework governing mineral exploration and development (see Appendix).

(b) protecting the health of Canadians

Health and safety are within the powers of the Government of the Northwest Territories under the Public Health Act. The Canada Mining Regulations do not restrict the application of any territorial or federal legislation that protects the health of Canadians.

The Petition does not state which aspects of the mine's history it wants addressed or how this relates to the substance of the Petition on "free entry." This is a very old mine. Although the mine is required to operate according to the relevant health and safety regulations, the company as well as both levels of government are fully aware of some potential problems related to the emission and storage of arsenic. All parties are working cooperatively in finding solutions to these potential problems.

Several federal and territorial agencies have responsibilities related to the control and management of the mining wastes associated with the Giant mine. In carrying out these responsibilities over the last two decades, these agencies have required the mine owner to undertake studies and they have commissioned independent studies to determine the potential for environmental and human health effects from mining activities. These studies, which have focussed on arsenic in local aquatic eco-systems and air, have found that with improvements in waste management the levels of arsenic in the environment have dropped significantly over the years and are not considered a significant environmental or human health concern. Recent studies by the department have found that arsenic levels in drinking water and fish from Great Slave Lake near Yellowknife do not pose a health concern.

The company and government agencies are currently completing studies to determine the best approach for the long term management of arsenic wastes that have been placed in underground storage vaults. If not properly managed, these wastes could pose a long term environmental and human health concern. Regulatory agencies, in particular the Northwest Territories Water Board, will consider the findings of these studies and other factors, including public interventions, in establishing legal requirements related to the future closure and decommissioning of the mine.

Subsection 3(2) of the Canada Mining Regulations states that the "Regulations are subject to any Act governing the production, conservation and control of ores containing radio-active elements." The inclusion is unnecessary for legal purposes, but was included to draw attention to the existence of the other legislation.

The territorial government’s Mine Health and Safety Act addresses the safety of workers exposed to radioactive materials. Additional protection for workers and the environment is afforded by the Atomic Energy Control Act and its regulations such as the Uranium and Thorium Mining Regulations which are administered by the Atomic Energy Control Board (reporting to the federal Minister of Natural Resources). This legislation will continue to protect workers, regardless of the system in place for disposing of Crown mineral rights.

(c) Protecting ecosystems

The licenced entry system for mineral disposition contained in the Canada Mining Regulations neither makes it impossible to take into account considerations of

eco-system health nor prevents an adequate system being designed. The Appendix describes the minimal effects of the staking process and the opportunities for environmental screening which occur as exploration proceeds.

DIAND does not act alone in identifying lands that need protection. Other agencies such as Heritage Canada and Canadian Wildlife Service recommend lands for protection. DIAND is also developing additional approaches to identifying lands valued for eco-system health. DIAND consults with the Inuvialuit Game Council and individual Hunters and Trappers Committees (HTC) in each of the six Inuvialuit communities to determine areas of environmental sensitivity and to identify effects associated with project-related activities. Environmental Sensitivity Maps are being prepared by DIAND based on the community wildlife management and conservation plans, existing oil and gas sensitivity maps, information gathered in consultations with Inuvialuit organizations and other available data. These maps are to be reviewed annually. All prospecting permits holders and prospectors licence holders are to consult with the HTC in the areas where the activity is to be carried out.

The approval of comprehensive land claims is changing the very context of land administration and resource management in the N.W.T. With the co-management bodies established under land claims agreements becoming the authorities for such matters as wildlife, land and water management, environmental assessment and land use planning, responsibility moves from government to these institutions of public government to which both Aboriginal people and both governments nominate members.

Land use plans have already been completed for two very large areas of Nunavut; Lancaster Sound and Keewatin. Land use planning provides a public forum for the consideration of all potential uses of land and water within a planning area at one point in time.

The Nunavut Planning Commission came into being July 9, 1996 as did the Nunavut Water Board and the Nunavut Impact Review Board. The Gwich’in Interim Planning Board has been in place since that claim was ratified in 1992. Permanent planning boards will be established in both the Gwich’in and Sahtu settlement areas upon passage of the Mackenzie Valley Resource Management Act.

The importance of land use planning under land claims, in the context of mineral exploration, is that environmental assessment process under the claims involve the initial step of checking proposals against the land use plan to make sure the activity is consistent with the plan. This will ensure that it is possible, in the early stages of approvals for exploration, to account for ecosystem health.

(d) Meeting International obligations

Although the documents to which reference is made do not refer to open access regimes, a sound planning process facilitates the discharge of obligations, both international and domestic, for in-situ conservation and certain international obligations. The emerging land claim settlements and the self government legislation, are resulting in a new resource management regime in the north, through the establishment of co-management bodies. These structures are consistent with Canada's international commitments.

Article 8 in the Convention on Biological Diversity requires, among other things, the establishment of protected areas, where special measures need to be taken to conserve biological diversity. In this respect, a Protected Area Strategy is currently being developed by the GNWT with assistance from DIAND. A number of national parks and other protected areas have previously been established. Furthermore, the implementation of sensitivity mapping to identify areas which should be excluded from some specific activities is being undertaken, in some parts of the N.W.T.

Principles 4 and 22 in the Rio Declaration are probably particularly pertinent to the issue. Principle 4 states, "In order to achieve sustainable development, environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it". The actions undertaken by the government, in full co-operation with all stakeholders, to protect the environment in the course of providing approvals for the development of the BHP project, are an example of how the government is adhering to the principle.

Principle 22 states, "Indigenous people and their communities and other local communities have a vital role in environmental management and development because of their knowledge and traditional practices. States should recognize and duly support their identity, culture and interests and enable their effective participation in the sustainable development". Given the participation of Indigenous people previously in such programs as the Arctic Environmental Strategy, and more recently on co-management boards, and in public hearings, it is clear that opportunities exist for Indigenous people to play a significant role in environmental management and development. DIAND provided support for a study on Traditional Ecological Knowledge which will result in a soon to be published book. The existence of open access for mineral exploration is not hindering this participation or reducing the impact that local communities can have.

The United Nations draft Declaration on the Rights of Indigenous peoples considers the rights of Indigenous and local communities to embodying traditional lifestyles. As far as can be determined, access to Crown lands for the purposes of mineral exploration is not compromising the practices of indigenous and local communities in this context.

Chapter 26 of Agenda 21 provides a basis for recognizing and strengthening the role of Indigenous people and their communities in the implementation of the Agenda. The government of Canada has established a process to empower Indigenous people and their communities through programs to implement self government, settlement of land claims, and participation in various processes, e.g., the development of departmental sustainable development strategies, and the provision of funding so that they can be part of environmental assessment processes. Co-management boards already exist in the Inuvialuit Settlement Region and in Nunavut. With the passage of the Mackenzie Valley Resource Management Act, Indigenous people in the N.W.T. will have a legislated role on co-management boards. Consequently, even without a mechanism for withdrawing lands from disposition or staking for reasons of eco-system health, it is unlikely, in the event of subsequent development, that significant eco-systems will be damaged because of other mechanisms in place to prevent or mitigate the impact of development.

To our knowledge, the lack of a mechanism to prevent staking of mineral claims on Crown lands that have not been protected or withdrawn from disposition or staking, is not inconsistent with the draft Declaration on the Rights of Indigenous peoples.

The regime currently in place in the N.W.T. is consistent with Section 35 of the Constitution Act.

(e) promoting equity

One of the advantages of the licenced staking system is that it gives everyone equitable access to mineral resources. The Aboriginal prospector can compete with major multinational mining companies in staking mineral claims. The licenced staking regime has provided an avenue for Aboriginal people and other individuals to participate and compete

in the mining industry as prospectors and contract stakers and in the development of junior mining companies. Equity is further enhanced by royalty sharing provision where claimant groups in areas of settled land claims may share in royalties from production of Crown minerals.

DIAND has made significant progress in promoting equity. One of the most pressing issues for Aboriginal people in the N.W.T. is the creation of jobs and opportunities for business. It takes an average of about 10 years to progress from staking a property to bringing it into production. With this lead time and considering the long odds against any one mineral property containing an ore body, suspending staking until all land claims are settled could reduce the number of jobs available during negotiations and for many years thereafter and would not promote equity for Aboriginal people. The process that led to the authorization for BHP Diamonds Inc. (BHP) to proceed with the development of a diamond mine, clearly shows that Aboriginal groups, that have not completed land claims agreements, are not shut out from the benefits of sustainable development. As a result of negotiated Impact and Benefits Agreements with BHP, the Aboriginal people secured significant benefits in the form of cash payments, jobs, training and business opportunities. This happened because of DIAND’s actions. It is a clear indication of DIAND’s commitment to ensure that maximum benefits from mineral development is provided to Aboriginal communities.

The staking of a mineral claim does not prevent the government enforcing its sustainable development policy. It is recognized that the act of staking has minimal effect on the environment and is exempted from screening. Land use legislation and various other legislation will trigger an environmental review of a project before it reaches an advanced stage. The result of the licenced staking provisions of the Canada Mining Regulations is not to exempt the holder from any part of the environmental process.

The petitioners are correct in that there is no general process to "pre-assess" the whole N.W.T. for either mineral or ecological values. Such a task would simply be too costly, time-consuming and the results might well become outdated before they were used. However, the Canada Mining Regulations incorporate an ongoing assessment process

because of the requirement to submit reports on exploration work. This helps to build the geoscience information base and eliminates the need to potentially re-do exploration work. Ecological assessments are a part of the environmental assessment process for large projects and are also done by agencies putting forward protected area proposals. Mineral and Energy Resource Assessments are carried out for proposed national parks. These kinds of initiatives can lead to the withdrawal of lands from disposition as interim protection or permanently such as for the Thelon Wildlife Sanctuary or Polar Bear Pass National Wildlife Area.

Resource evaluation for both mineral and ecological values are reiterative. No one evaluation can be considered the final and complete assessment. Only, as more detailed research builds on knowledge, can better decision be made.

Alternatives to ground staking such as map staking are very efficient where decisions to stake claims are made in the office, but do not help the prospector in the field who wants to stake a claim over promising ground. Map staking would also eliminate a great number of well paid jobs presently performed by local residents.

In the absence of a complete advance knowledge of mineral and ecological values, there is always the risk that a development will be stopped for environmental reasons.

(g) preventing pollution

Subsection 73(1) of the Canada Mining Regulations gives the Minister of DIAND authority to deal with pollution. There are numerous other federal and territorial legislation that regulates pollution. Pollution of air, land and water is regulated by the Canadian Environmental Protection Act, the Canadian Environmental Assessment Act, the Fisheries Act and the Northwest Territories Waters Act.

The Canada Mining Regulations do not require representation work. However, it is a condition for maintaining claims. A mineral claim holder may perform and report on mineral exploration to a value specific to the Canada Mining Regulations and apply it to meet the conditions for retaining a claim. Representation work is carried out in accordance with environmental protection legislation as described in the Appendix. As stated above, subsection 73(1) of the Canada Mining Regulations gives the Minister of DIAND authority to deal with pollution.

Map staking is presently not allowed in the N.W.T. because most areas have not been surveyed. Government does not enforce which technology should be used but does insure that activities with potential to damage the environment are screened to mitigate damages. Penalties for non-compliance exist in all legislation. The mining industry has to mitigate all aspects of the environmental disturbance which occurs on their mineral claims. In many cases, the exploration techniques used are chosen on the basis of their environmental impact. Indirectly, there may be rewards for activities that are less damaging to the environment. For example, more stringent guidelines for diamond drilling on ice have resulted in increased drilling costs. Since the amount of representation work is measured by the cost of the work, greater representation work credit is given.

(h) respect for nature and the needs of future generations

Being able to plan long term mineral development in a staged and managed manner is extremely difficult, given that investor interest is cyclic by nature and is driven by a number of factors such as international supply and demand. DIAND focuses on the management of the mineral industry by ensuring that the "rules of the game" are clear, that the environmental and social costs are minimized and that benefits are distributed throughout the affected region over time. There are many recent examples of this approach including DIAND’s participation in the West Kitikmeot Slave Study and the N.W.T. Community Mobilization Job Partnership Strategy. DIAND initiated and became a founding partner in the West Kitikmeot Slave Study because the department recognized the need for baseline information for informed decision-making facilitating sustainable development. DIAND was also a founding partner of the N.W.T. Community Mobilization Job Partnership Strategy which is helping to build the capacity of N.W.T. communities to participate

meaningfully in mineral development and associated economic activities.

The following quotation is from one of the closing paragraphs of the Petition:

Integrating sustainable development into its decision making, as articulated in the departmental draft sustainable development strategy is DIAND’s goal. In addition to the December 1996 consultation workshops, which focussed on identifying sustainable development challenges for the department, DIAND conducted an internal scan of its programs and policies.

The current regime is rapidly changing. It creates an opportunity to proactively incorporate principles of sustainable development into the changes as they are being introduced. The department has a heavy agenda of pending legislation, including the new Mackenzie Valley Resource Management Act, the Nunavut Waters Act, the Nunavut Surface Rights Tribunal Bills and is not able to commit resources, at this time, to a comprehensive review of all legislation.

In addition, the North is entering a transitional period during which the settlement of comprehensive land claims is changing the very context of land administration and resource management in the N.W.T. The establishment of new institutions provides opportunities to create modern, predictable and efficient, natural resource and environmental management practices which better promotes sustainable development. Conducting a comprehensive review of existing resource management legislation including the Canada Mining Regulations, will be more appropriate, after land claims are settled in the N.W.T.

In conclusion, the Canada Mining Regulations do not work alone. There is a multitude of existing legislation which regulates the mining industry in the N.W.T. in a sustainable manner. The licenced staking regime, which the petitioners call "free entry", supported by the overall regulatory framework, is consistent with the principles of sustainable development.