Subsurface Property Rights

In British Columbia (BC), the purchase of Crown land by a private landowner usually involves the exclusive transfer of surface rights.  Subsurface rights, including access to minerals, natural gas, and petroleum resources, are retained by the province for disposition to individual prospectors or corporations.  Rights to access these resources are referred to as subsurface property rights.

Land use policy in BC is guided by an over-arching principle that mining is the best possible use of Crown land.^[1]  This land use policy regime is described as a “free entry” system, which will be explained in this learning module.  In September, 2023, the BC Supreme Court ruled that the province’s mining permit system—the Free Entry system—is not in compliance with the government’s duty to consult Indigenous groups.  This Court decision is discussed below.

As a mining claim progresses from exploration to development, the Ministry of Environment and Climate Change Strategy (MoE) oversees the environmental assessment (EA) certification process as conducted by the Environmental Assessment Office (EAO).  Following the decommissioning of a mine, the provincial government oversees remediation efforts.  While jurisdiction over mine development is mostly within the provincial purview, the process is also influenced by Natural Resources Canada, Environment Canada, Fisheries and Oceans Canada, and Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC).

A simplified overview of the mining process is presented in Figure 1.

Figure 1.  Overview of mining process.

Mineral tenure and the “free entry” system

Obtaining rights to subsurface minerals is described as a “free entry” system.  This system, under the Mineral Tenure Act ([RSBC 1996] Chapter 292), enables almost any person to apply for a mineral claim almost anywhere in BC.  All one has to do is apply for Free Miner certificate, pay the fee, and register their claim on line through the BC Mineral Titles Branch.  A claim can then be issued without either the claim owner or the government contacting the owner of private land or an Indigenous Nation of unceded traditional territory.  No consultation or consent is required.  Note that the free entry system applies to minerals only, not to oil and gas or coal.

Although most of the provincial land base is open to subsurface development, a claim cannot be made anywhere in BC; there are some restrictions.  Section 4(2) of the Mineral Tenure Act Regulation (B.C. Reg. 529/2004, O.C. 1161/2004) defines lands that are “alienated,” which are lands on which claims cannot be made.  These alienated lands include a park, conservancy, or ecological reserve established under either an act of BC or Canada, areas where mining activity is prohibited, and First Nation Reserves. The following are areas where mineral prospecting is prohibited:

• lands where mineral rights are owned privately;
• parks, ecological reserves, sensitive areas, and heritage sites;
• lands inhabited by buildings (including a 75 m buffer surrounding residences);
• lands subject to Ministerial withdrawal (Mineral Tenure Act, s. 17(1); Environment and Land Use Act, s. 7(1))
• mineral reserves (Mineral Tenure Act, s.22)
  • no registration or conditional.  A “No Registration” reserve prohibits the acquisition of a mineral and/or placer claim; a “conditional” reserve stipulates the specific conditions or restrictions which apply to a claim registered within the reserve.
• coal land reserves (Coal Act, s. 21)
  • no disposition.  In an area designated as a coal land reserve, a person must not explore for, develop or produce coal on a coal land reserve; and a licence or lease must not be issued for a coal land reserve.
• oil and gas: areas withdrawn from disposition (Petroleum and Natural Gas Act, s. 72(1)).

The first step to obtaining subsurface rights involves applying for a Free Miner’s Certificate.  Any person of legal age who resides in Canada, or is legally entitled to work in Canada, will receive a certificate upon payment of a small fee.  Once in possession of a certificate, a Free Miner has legal right of entry to any private or public lands designated as a “mineral zone” in order to conduct staking, the mechanism by which a prospector registers a mineral claim with the province.  A Free Miner may use the Mineral Titles Online system to register a claim without conducting a site visit.  Staking requires no consultation with affected landowners or the Crown.  After registered, a claim can be maintained indefinitely provided a modicum of assessment is conducted annually.  Approximately 85% of the province is available for staking by a Free Miner.^[2]

The preferential access to land by Free Miners is a tenet of the Free Entry System.  Under s. 14(1) of the Mineral Tenure Act, after a Free Miner has registered a claim, that person “may use, enter and occupy the surface of a claim or lease for the exploration and development or production of minerals.”  Exploration is conducted by a claim holder to determine the location and quality of potential mineral deposits.  Preliminary activities involve surveying, road and trail construction, water sampling, and low impact drilling.  In BC, a miner conducting exploration activities may disturb up to 1,000 tonnes of rock without triggering permitting requirements.^[3]

For more intrusive exploration activities, such as core drilling and camp construction, the MEMLCI is responsible for granting permits outlining environmental and safety requirements.  Before carrying out such work, an exploration referral, termed Notice of Work, is distributed to various stakeholders who are afforded 30 days for comment.  While a land owner cannot deny access to a claim holder, they may request compensation for disturbances occurring on property.  Conflicts between parties are negotiated through the provincial government’s Surface Rights Board, who determines the conditions for rights of access and compensation; the Board cannot refuse exploratory access to a prospector.

If a Free Miner locates a viable deposit during exploration, they must apply for a mineral lease prior to commercial development of the claim.  Provided the lease requirements are satisfied, the MEMLCI has no discretion to refuse an application. After a mineral lease has been granted, the proponent will usually negotiate to obtain surface rights necessary to access the subsurface deposit.  This may involve significant compensation for private landowners or transfer from the Crown.

Prior to actual mine operations, the final stage in the Free Entry System usually involves an environmental assessment (EA).  An EA is triggered under the British Columbia Environmental Assessment Act (BCEAA) when anticipated mineral output exceeds 75,000 tonnes annually, or when the Minister determines the project will have significant environmental impacts.  Depending on the scale of the proposed development, a joint EA may be conducted between provincial authorities and the Impact Assessment Agency of Canada (IAAC).  EAs serve primarily to predict and mitigate the potential environmental impacts of a proposal, and to improve project design through consultation with stakeholders.  An EA will also determine monitoring requirements for mine operations, and the procedures for decommissioning and reclaiming an exhausted deposit.  EAs are important for establishing regulatory requirements that were overlooked in a proposal.  However, it is uncommon for a mining development to be rejected outright.

The allocation of property rights created by the free entry regime is especially salient for Indigenous peoples, whose traditional territories overlap significantly with mining operations and mineral deposits.  According to the Assembly of First Nations, about 36% of all Indigenous settlements in Canada are within 50 km of a major mine operation.^[4]  Furthermore, despite the duty to consult established in the Delgamuukw Supreme Court decision^[5], the procedures for meaningful consultation are not well defined and, according to many Indigenous groups, are inadequate.  Finally, since the majority of unextinguished Indigenous title in BC is not “proven,” Indigenous peoples are generally unable to exercise even the limited appeal mechanisms available to private land owners.  Thus, the free entry provisions for claim staking, exploration, and mine development legislated under the Mineral Tenure Act may be viewed as potentially contrary to s.35 of the Constitution Act, 1982, which recognises and affirms Indigenous rights.

The inability of Indigenous peoples to participate meaningfully in the regulation and development of mining activities on traditional territories may also be in contravention of numerous international agreements to which Canada is obligated.  These agreements include the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, the International Convention on the Elimination of All Forms of Racial Discrimination, and the United Nations Declaration on the Rights of Indigenous People.

Oil and gas tenure

Subsurface property rights also include oil and gas activities, including exploration and development. Like minerals, oil and gas activities are governed by legislation that cover a range of tenures. Key legislation includes Oil and Gas Activities Act(SBC 2008, Chapter 36), Pipeline Act (RSBC 1979, Chapter 328), Petroleum and Natural Gas Act(RSBC 1996, Chapter 361), among others. In addition, oil and gas activities, including exploration, development, pipeline transportation, and reclamation, must have specific approval from the BC Energy Regulator (BCER)^[6]. The BCER is an independent, regulatory agency.

Under s. 72(1) of the Petroleum and Natural Gas Act, the Minister may withdraw Crown oil and gas reserves from disposition.

Mineral Reserves and Coal Land Reserve

A mineral reserve or coal land reserve is an area in which subsurface activities are prevented or restricted (i.e., not allowed).  A mineral reserve or coal land reserve is established by regulation under Section 22 of the Mineral Tenure Act and Section 21 of the Coal Act, respectively.  Legally, a reserve is established to either prohibit registration (“No Registration” reserve) of a claim or to restrict the rights acquired (a “conditional” reserve). In relation to the “free entry” regime discussed above, when a No Registration reserve is established, a free miner must not register a mineral claim.

• The No Registration Reserve (NRR), previously termed No Staking Reserve (NSR), prohibits a free miner from registering a mineral claim and/or a placer claim over a parcel of land.
• A Coal Land Reserve (CLR) prohibits a person from applying for a coal license over a parcel of land.
• The Conditional Registration Reserve (CRR) permits acquisition of title on a parcel of land subject to the specific conditions stated in the Regulation.  For example, a conditional reserve over a proposed hydro transmission line right-of-way would allow acquisition of a mineral claim but provide that the recorded holder or agent must not interfere with, obstruct or endanger the construction, operation or maintenance of that project identified in the Regulation.

Indigenous Nations Reclaiming Governance over Mining Activities

The concerns of Indigenous Nations go far beyond the negative environmental effects of mining.  For many years, Indigenous Nations have raised fundamental concerns about how the governance of mining activities infringes Indigenous title and rights.  The ‘free entry’ system is central to these concerns.  Like elsewhere in BC (outside of protected areas), any person can stake a claim within the traditional territories of Indigenous Nations.  Although legally permitted according to BC laws, this free entry process violates the requirement for free, prior, and informed consent under the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).  Nor is free entry consistent with BC’s Declaration on the Rights of Indigenous Peoples Act (DRIPA).

In the Yukon, the Ross River Dena Council took the government to court over the territory’s free entry system for mining claims.  Ross River argued that free entry violated their rights.  In 2013, the Court of Appeal of Yukon ruled in favour of Ross River, stating that the Territory must consult with unsigned First Nation governments before a mineral claim is staked on their traditional lands.  A similar situation is taking place in BC.

In 2022, the First Nations Energy and Mining Council (FNEMC) released a report, Indigenous Sovereignty: Implementing Consent for Mining on Indigenous Lands,^[8] that outlines 25 recommendations for how Indigenous Nations can assert governance over mining activities according to their own laws and traditions.  The FNEMC present their recommendations as a set of “near-term practical” (p. 28) options for Indigenous Nations to exercise governance and grant consent within the framework of BC’s DRIPA, as an interim step as UNDRIP is implemented robustly.  In this context, the recommendations address each of five stages of mining activities from staking claims to reclamation, as follows (from pp. 30-31).

• Recommendation 1:  Mineral Tenure and Staking Claims

IGBs [Indigenous governing bodies] should exercise statutory powers under the Mineral Tenure Act. This should be done exclusively by the IGB or jointly with the Province.  The main statutory decision maker under the Mineral Tenure Act is the “Chief Gold Commissioner”.  IGBs could establish an Indigenous equivalent to the Chief Gold Commissioner who could issue free miner certificates, cancel claims, or address conflicts related to claims.  Changing the names of these statutory titles should also be considered.  The title Chief Gold Commissioner does not have the same stature as a “Chief” in Indigenous governance.  Moreover, the Chief Gold Commissioner is a misnomer as this position is responsible for more minerals than just gold.

• Recommendation 2:  Crown free miner certificates should only be issued with IGB consent.

IGBs should require a detailed engagement process be established prior to free miner certificates being issued.  This engagement should include a knowledge-based assessment whereby the individual or company wishing to obtain a free miner certificate must demonstrate an understanding of Crown and Indigenous laws.  Alternatively, free miner certificates could be abolished altogether, and replaced with an IGBs established knowledge-based assessment for any person seeking to explore for minerals on their lands (see Recommendation 4).  If free miner certificates are continued, they should also be renamed.

• Recommendation 3:  Registration of a mineral or placer claim should only grant the right to explore for minerals.

IGB consent for a free miner certificate should limit free miner activities to the conduct of basic exploratory activities on Indigenous lands. It should be clear that the free miner certificate does not presume future activity or permits.

• Recommendation 4:  IGBs could develop and administer their own claim staking processes.

As IGBs strengthen their role in managing and protecting lands, IGBs could establish their own system for claim staking, which will be based on their own governance and values. This could include issuing their own mining certificates, perhaps by another name, and identifying the activities that will be allowed.

• Recommendation 5:  IGBs should restrict the use of surface rights, regardless of who holds a mineral or placer claim.

The Province’s mining laws generally enable a free miner to access surface lands as part of the subsurface claim. IGBs should consider approaches to surface land uses that are consistent with their own values. This could include restricting surface uses on their lands, or for example, expanding the use of Indigenous Protected and Conserved Areas.

Within a consent framework, the report acknowledges that Indigenous Nations will do some or all of the following:

• make, or jointly make, decisions regarding mining activities;
• act as regulators for mine activities, either jointly with the Province or alone;
• collect rents and taxes for mine activities on our territories; and/or be mine proponents.