The following discussion of the mining sequence and the main acts and regulations governing it in the Northwest Territories (N.W.T.) Is not intended to be exhaustive. The reader is directed to the acts and regulations for complete details. This discussion forms part of the response to the Petition submitted on April 15, 1997 by

Mr. Kevin O'Reilly and Mr. Nigel D. Bankes, officers of the Canadian Arctic Resource Committee to the Auditor General under section 22 of the Auditor General Act. This discussion supports the position held by the Department of Indian Affairs and Northern Development (DIAND) that the mining sequence in the N.W.T. is adequately regulated from beginning to end, in a manner consistent with the principles of sustainable development.

The regulatory framework described in this discussion is a snapshot in time. Since the early 1990s, most major pieces of legislation governing mineral development in the N.W.T. have changed. For example, the Northern Inland Waters Act was replaced by the Northwest Territories Waters Act which in turn will soon be replaced by the Mackenzie Valley Resource Management Act (MVRMA) and the Nunavut Waters Act. The Canadian Environmental Assessment Act process has replaced Environmental Assessment Review Process Guidelines, Environmental assessment processes will soon be established under the MVRMA and Nunavut Resource Management Act, which will, in most cases replace the Canadian Environmental Assessment Act (CEAA). Extensive amendments have been to the Canadian Environmental Protection Act (CEPA), the Territorial Mine Safety Act has been replaced by the Mine Health and Safety Act.

Under most settled land claims in the N.W.T. land use planning boards are being or will be established. For example, in the Nunavut settlement region the Nunavut Planning Commission was established in early July 1997, while the Gwich'in Interim Land Use Planning Board was established when the agreement was signed in 1992. Permanent land use planning boards will be put in place for both the Gwich'in and the Shatu Dene and Metis settlement areas upon passage of the MVRMA. The land use planning function in the settlement regions effectively replaces a function which, until recently, was carried out by the federal government. The land use planning process will develop planning policies, priorities and objectives regarding the conservation, development management and use lad land within the various settlement regions.

Not only have the regulations changed, the regulators are changing. The MVRMA will establish co-management boards in which Aboriginal groups will participate in regulating mineral development in their areas. In Nunavut, the Nunavut Impact Review Board (NIRB) is responsible for environmental assessments while the Nunavut Water Board (NWB) issues and renews water licences. Although this has represented a period of uncertainty for those in the mining sequence, it has been an opportunity to ensure that modern resource management practices and sustainable development principles are being enshrined in legislation. This process is ongoing.

The mining sequence covers all activities related to mining, from initial mineral exploration or prospecting and claim staking, through to mineral production and eventual mine closure and rehabilitation. The role of the individual prospectors and the exploration and mining companies involved in the Canadian mining sequence is to find, delineate and develop economic mineral deposits, then to mine and concentrate the ore for further processing either domestically or internationally for the eventual manufacture into consumer durables or other end uses. The discovery of economic mineral deposits is what maintains the mining industry's ability to continue to be active in the economy and to provide the benefits from that activity. These activities range in scope from a single person out prospecting to the construction of a large scale mineral development and production facilities that will operate over several decades.

The mining sequence is closely regulated before the first claim stake is put into the ground until the final reclamation of the mine site. In the N.W.T. there are no less than twenty-five different Acts of Parliament or sets of regulations which together govern the mining sequence.

In this discussion on the mining sequence and the Acts and regulations under which it is pursued is limited to Crown lands in the N.W.T. Crown lands in the N.W.T. are controlled and administered for the federal government, for the most part, by DIAND. The Territorial Lands Act, and its several regulations is the federal legislation responsible for the disposition and administration of Crown lands. The Canada Mining Regulations (CMR), under the Territorial Lands Act sets the methods of disposition and administration of minerals (except for coal, oil, natural gas and minerals which are quarried). By virtue of federal control and administration, practically all activities on Crown lands undergo an environmental assessment in order that DIAND fulfill its regulatory obligations before issuing permits, approvals or authorizations.

As described below the mining sequence follows a fairly standardized path in that, generally speaking, the sequence is a process of answering yes or not to a series of questions at each step in the sequence with respect to the probability of a economic mineral deposit being found. A "yes" generally leads to the next step in the sequence if financial resources are available while a "no" answer generally leads to the land reverting to the Crown.

Past experience indicates that on average, one in every 10,000 starts in the mining sequence leads to the development of a mine.

 The Mining Sequence - Availability of Land

One of the earliest steps in the mining sequence is the determination of what land is available. In the N.W.T. there is a significant amount of Crown land which is not available to the mining sequence including; National Parks, National Wildlife Areas, cemeteries and burial grounds, lands withdrawn on a temporary basis for the purposes of settling an Aboriginal land claim except where existing mineral rights have been established, and lands under the administration and control of other federal departments including National Defence, Natural Resources Canada or Transport Canada unless with written permission from the responsible Minister. As well, Commissioner's land which has been withdrawn by the Government of the Northwest Territories (GNWT) are also not available to the mining sequence.

Private lands where the subsurface is owned by Aboriginal groups pursuant to the settlement of a land claim are not subject disposition under the CMR.

As noted above, the methods of disposition and administration of minerals in the N.W.T. are controlled and administered through the CMR. The CMR provide for the holders of a prospector's licence to acquire exclusive rights for the prospecting and development of mineral rights by staking and recording mineral claims. For remote areas in the N.W.T. the CMR provide for the holders of a prospectors licence to obtain a prospecting permit which covers a large area and provides the licence holder exclusive right to prospect and to stake mineral claims in the area.

Entry onto private lands where surface rights have been established for purposes of acquiring the underlying Crown mineral rights may be made with the permission of the surface holder or by permission following arbitration.

In the areas where Aboriginal land claims have been settled and legislated by the federal Parliament, a degree of control over Crown lands has been, or will be, transferred to the Aboriginal claimant groups through their participation on regulatory co-management boards. These co-management boards will ensure that community values and aspirations are part of the decision making process with respect to economic development in the settled areas. As well, within the settlement areas there is Aboriginal ownership of the land (known as fee simple title) to specifically defined surface land areas which can also include subsurface land areas. In these areas, land is controlled and administered by the respective claimant group and therefore they will need to be approached by any person or company wishing to stake a mineral claim.

Federal: Territorial Lands Act (Canada Mining Regulations); Canada Wildlife Act; Migratory Birds Convention Act; National Parks Act; Historical Resources Act; NWT Act (Archeological Sites Regulations).

 GNWT: Commissioner's Land Act and regulations.

Aboriginal: Gwich'in Land claim Settlement Act; Western Arctic (Inuvialuit) Claims Settlement Act; Nunavut Act; Nunavut Land Claims Agreement Act; Sahtu Dene and Metis Land Claim Settlement Act.

In most cases a prospector or exploration company will identify areas of interest from a number of sources such as, a literature search, the work of others nearby, or work in similar geological environments. This strategy increases the possibility that an economic ore deposit will be identified.

Before any type of exploration activity on Crown lands in the N.W.T. can be undertaken, a prospector's licence must be obtained from a federal government mining recorder. This licence gives the individual or a company registered in the N.W.T., the authority to enter onto Crown land in order to prospect and to stake a mineral claim except where the surface rights have been disposed in which case the licence holder must get the permission of the owner to enter the land. Once the individual prospector or a properly registered company has undertaken the necessary homework, obtained at least a prospector's licence and any other permits which are necessary to undertake the expected level and type of exploration work then the process of area selection can begin.

Following selection of the land and the required claim staking, any properly staked mineral claim must be recorded by the local mining recorder. Having the claim recorded ensures that the licensee's temporary right to any sub-surface minerals is established. The staking of a mineral claim does not stop others from undertaking non-mineral related activities within the claim boundaries such as eco-system assessment, hunting, trapping, or nature hiking.

Additional authorization permits are required if the mineral claim holder decides to undertake any activity beyond those normally associated with early stage exploration such as building a small temporary camp in order to do preliminary on-ground geophysical measurements, or to do small scale geochemical sampling such as stream sampling or chip sampling of naturally exposed bedrock. However, the use of powered mechanical equipment which weighs more than 500kg requires an environmental review by the permitting authority.

The mineral claim holder wishing to undertake a more intensive exploration program needs both a land use permit, which details the conditions of land use and may need a water licence, which details the amount of water used and the condition of any water being returned to the environment.

Federal: Territorial Lands Act (Canada Mining Regulations); Canadian Environmental Assessment Act; Fisheries Act; Canada Wildlife Act; Migratory Birds Convention Act; National Parks Act; Historical Resources Act.

GNWT: Commissioner's Land Act and Regulations.

Aboriginal: Gwich'in Land claim Settlement Act; Western Arctic (Inuvialuit) Claims Settlement Act; Nunavut Act; Nunavut Land Claims Agreement Act; Sahtu Dene and Metis Land Claim Settlement Act.

 Mining Sequence - Regional Surveys

In order to identify potential mineral occurrences within the mineral claim boundaries a regional survey may be undertaken. Most commonly this is done using airborne geophysical surveys with follow-up work on the ground. In most cases, given the remote nature of most of the N.W.T., it is necessary to establish field camps before any actual exploration work can economically be undertaken.

Only the smallest field camps can be established without any permits beyond the prospector's licence. Any camp which will use regulated powered equipment or material such as fuel or explosives beyond the established thresholds requires a land use permit which, depending on the location in the N.W.T., is obtained either from DIAND or the authorized Aboriginal group or co-management board. The land use permit will undergo an environmental assessment by the issuing authority such as the Nunavut Impact Review Board who will set out terms and conditions which must be followed subject to inspections. Some of the conditions covered relate to fuel storage, geochemical sampling, access trails, temporary camp construction and removal, spill continency plans and other issues.

The Territorial Lands Act governs the disposition and administration of federal Crown lands in the N.W.T., including mineral rights and access. The CMR dispose of subsurface rights, and regulate mineral exploration licensing and mining rights. Where legislated thresholds are surpassed, the Territorial Land Use Regulations govern temporary use of surface such as for trail construction, fuel storage use and camp facilities for temporary exploration activity on unoccupied Crown lands (where no surface rights have been granted). The Territorial Land Regulations provide for leasing of surface rights where long terms structures and occupation of the land is required.

Exploration carried out prior to mineral rights acquisition, including airborne geophysics, geochemical surveys, geological surveys, may be carried out under a prospector's licence required under the CMR. The Commissioner's Land Act governs surface access and disposition (through the GNWT Department of Municipal and Community Affairs) to Commissioner's lands.

The actual operation of a field camp must meet the minimum working conditions as established by the GNWT Labour Standards Act and Regulations, the sanitation and medical care standards as established by the GNWT Public Health Act, the use and control of open fires as set out in the GNWT Forest Protection Act. The land use permit will establish conditions for the storage of bulk fuels and explosives as well as the use of mechanical equipment including vehicles and drill rigs.

Federal: Territorial Lands Act (Canadian Mining Regulations, Territorial Land Use Regulations); Canadian Environmental Assessment Act; Fisheries Act.

GNWT: Commissioner's Land Act; Public Health Act; Emergency Medical Aid Act; Workers Compensation Act; Forest Protection Act; Fire Protection Act; Labour Standards Act; Wildlife Act; Labour Standards Regulations; Mines Health and Safety Regulations.

Aboriginal: Gwich'in Land Claim Settlement Act; Western Arctic (Inuvialuit) Claims Settlement Act; Nunavut Act; Nunavut Land Claims Agreement Act; Sahtu Dene and Metis Land Claim Settlement Act.

Except in areas administered by Aboriginal authorities, the work undertaken during primary exploration surveys on Crown lands are administered by DIAND under the CMR of the Territorial Lands Act. The CMR govern rights, representation work and licence requirements for mineral exploration in the N.W.T. Primary exploration is done on mineral claims and prospecting permits by holders of prospector's licences. Primary exploration may include site specific airborne geophysics, line cutting, prospecting, ground geophysics, geochemical surveys, geological surveys, hand and mechanical trenching/stripping and drilling to determine the nature and extent of a mineralized zone that might encourage advanced exploration which in turn could lead to the development of a mine. The rights granted under the CMR authorize exploration on Crown lands. The Territorial Land Use Regulations set the environmental terms and conditions for the temporary use of unoccupied Crown lands and a land use permit will be required in the majority of the exploration activities on both Crown and Commissioner's lands. The Northwest Territories Waters Act may require that a water licence be obtained for the use of water over certain quantities, the condition of used water being returned to the environment and the location of waste deposits relative to the watershed any where in the N.W.T.

Federal: Territorial Lands Act; Northwest Territories Waters Act; Explosives Act; Canadian Environmental Protection Act; Transportation of Dangerous Goods Act; Canadian Wildlife Act; Canada Parks Act; Forest Management Act; Territorial Timber Regulations.

GNWT: Commissioner's Lands Act; Explosive Use Act; Environmental Protection Act; Environmental Rights Act; Mining Safety Act; Mine Health and Safety Act and Regulations.

Aboriginal: Gwich'in Land Claim Settlement Act; Western Arctic (Inuvialuit) Claims Settlement Act; Nunavut Act; Nunavut Land Claims Agreement Act; Sahtu Dene and Metis Land Claim Settlement Act.

Except in areas administered by Aboriginal authorities, the regulation of advanced exploration surveys on Crown land is administered by the DIAND under the Territorial Lands Act and the CMR. The GNWT administers mine safety and miners health and welfare under territorial legislation, and issues land use permits for Commissioner's lands. Advanced exploration on a claim or a claim group includes activities such as diamond drilling on a grid, bulk sampling, open pitting, underground mining and pre-development construction for pilot operations, in order to establish a grade and tonnage for the mineralized zone. Activities associated with advanced exploration will under go an environmental assessment and screening by the regulatory authority depending where the project is located.

Federal: Territorial Lands Act (Canada Mining Regulations, Territorial Land Use Regulations); Northwest Territories Waters Act; Canadian Environmental Protection Act; Canadian Environmental Assessment Act; Fisheries Act (Metal Mining and Liquid Effluent Regulations); Arctic Waters Pollution Prevention Act; National Parks Act; Northwest Territories Act (NWT Archaeological Sites Regulations) Historic Sites and Monuments Act; Navigable Waters Act.

 GNWT: Commissioner's Land Act; Mine Health and Safety Act and Regulations; NWT Historical Resources Act; Territorial Parks Act; Explosives Use Act; Public Health Act; Fire Prevention Act; Emergency Medical Aid Act; Gas Protection Act; Labour Standards Act and Regulations.

Aboriginal: Gwich'in Land Claim Settlement Act; Western Arctic (Inuvialuit) Claims Settlement Act; Nunavut Act; Nunavut Land Claims Agreement Act; Sahtu Dene and Metis Land Claim Settlement Act.

 The Mining Sequence - Development and Production

Except in areas administered by Aboriginal authorities, the development and production of mineral deposits on most Crown land is regulated by DIAND under the Territorial Lands Act (Canada Mining Regulations and Territorial Land Use Regulations) and in accordance with the Canadian Environmental Assessment Act (CEAA). The development and production of mineral deposits on Commissioner's lands is regulated by the GNWT Department of Municipal and Community affairs. Most often, a surface lease and a mineral lease is obtained before any production commences. These leases give the holder exclusive use of the surface and subsurface in question. The site development would include the mine, mill works, concentrators, heap leaching facilities, labour housing and a transportation system. The mine works might be open pit (extraction of ores from the surface) or underground (extracting ores by shafts, tunnels, drifts). Beyond the quality and the quantity of the discovered mineral resources a number of external factors bear upon the decision to commence commercial operations; access to power, transportation, refining and marketing, and the availability of manpower and equipment. The current and forecast mineral prices bear heavily upon the decision to commence a full scale mining operation.

The decision to open a commercial mineral operation requires planning in order to succeed. The support systems such as on-site transportation, housing, labour and environmental protection, require a system of permits, standards and authorities which must be obtained before development construction can commence. These support systems give rise to a need to provide an environmental impact statement and a review and assessment under the Canadian Environmental Assessment Act. This review and assessment process can range from a basic Level 1 screening through to a more rigorous Level 2 screening or could even require extensive public consultations and panel hearings. In addition to the protection of the environment, wildlife and wildlife habitat, fisheries and fishery habitat, the social and economic impacts and opportunities will be examined and importance will be attached to the benefits and business opportunities accruing to the local communities and to the N.W.T. Although the current mineral legislation does not require a reclamation plan or security deposit, careful attention should be given to the current guidelines and policies respecting mine reclamation and acid drainage abatement.

Where a water licence is required by the Northwest Territories Water Act, for mine development purposes (water use and deposit of waste) a detailed reclamation plan and security deposit will be required. While the Minister of DIAND signs Class A water licences, the NWT Water Board is responsible for holding public hearings and writing the final terms and conditions of the licence.

Under the Territorial Lands Act, the project proponent will also require one or more surface leases. The terms and conditions of the leases cover the activities which are allowed to take place on the leases and are negotiated between the federal government and the project proponent.

Federal: Territorial Lands Act (Canada Mining Regulations, Territorial Land Use Regulations); Territorial Quarrying Regulations; Northwest Territories Waters Act and Regulations; Canadian Environmental Protection Act; Canadian Environmental Assessment Act and Regulations; Migratory Birds Convention Act; Canada Wildlife act; Northwest Territories Act (NWT Archaeological Sites Regulations); Fisheries Act; Atomic Energy Control Act; Uranium and Thorium Mining Regulations; Historic Sites and Monuments Act.

GNWT: Commissioner's Land Act; Mining Health and Safety Act; Explosives Use Act (Blasting Certificate Regulations; Mining Safety Regulations); Public Health Act; Wildlife Act; Forest Protection Act; Fire Prevention Act; Worker's Compensation Act; Labour Standards Act; Transportation of Dangerous Goods Act; Gas Protection Act; Miners Liens Act; Fair Practices Act; NWT Historical Resources Act; Territorial Parks Act.

Aboriginal: Gwich'in Land Claim Settlement Act; Western Arctic (Inuvialuit) Claims Settlement Act; Nunavut Act; Nunavut Land Claims Agreement Act; Sahtu Dene and Metis Land Claim Settlement Act.

A surface lease will require that the rights-of-way, spoil piles and platforms be stabilized and the site returned to as near its original state as is practical. Personal property, equipment and structures, will likely have to be removed. The land covered by the surface lease will be inspected prior to closure and, if all is in order, a certificate of compliance will be issued. If warranted, the closure of the operations may be subject to an environmental assessment.

A water licence will require a formal closure plan for the project to ensure that the territorial waters and watersheds are protected from further deposit of deleterious substances. The licence will be conditioned by the successful compliance with the approved closure plan before the financial assurance will be released on the abandoned property.

The abandonment and closure of a mine will not discharge the holder from liabilities without a satisfactory inspection. In some cases, a company may be required to continue monitoring the water discharge long after closure.

Federal: Territorial Lands Act (Canada Mining Regulations, Territorial Land Use Regulations); Northwest Territories Waters Act.

GNWT: Mining Health and Safety Act.