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Date: March 2014
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The Unconsolidated Non-Metallic Substances Guideline for Reserve Land was developed in response to a request from AANDC's regional offices in 2010. Subsequently, a Region-Headquarter Working Group was established and engaged for reviews, communications and consultations. The Department of Justice and the Northern Affairs Organization were also consulted and recommended the document for approval.
The intention of this guideline is to improve, accelerate, clarify and harmonise with provincial regimes the process of issuing permits and leasesfor unconsolidated non-metallic substances projects on reserve (typically sand and gravel) to maximize potential economic development and environmental benefits for First Nations. It will also ensure consistency of use and application of policy across regions.
This document presents a set of guidelines to support the administration and management of unconsolidated non-metallic substances on First Nations reserves in Canada. It is not intended to apply to First Nations under the First Nations Land Management Act. It supplements and supports the "Operational Policy on the taking, disposition, and removal of non-metallic substances from reserves" dated November 1, 2000 (Appendix B). It provides Aboriginal Affairs and Northern Development Canada (AANDC) regional offices with information and guidance related to this type of activity. This guideline is also useful to First Nations, their consultants and to resource developers in preparing their permit/lease application.
AANDC, in cooperation with First Nation Councils, is responsible for the administration and management of non-renewable mineral resources on First Nation reserves in accordance with the Indian Act. Section 93 of the Indian Act states that it is unlawful to remove any or all minerals from a reserve, including unconsolidated non-metallic substances, without explicit consent of the First Nation Council and written permission of the Minister of AANDC or the Minister's representative. AANDC regional offices provide guidance on applications for disposals and operational issues relating to mineral disposition on First Nation reserve land.
"Unconsolidated non-metallic substances" are defined as minerals located at or near the surface which may be removed by an open excavation that does not involve quarrying of hard rock or blasting. It includes sand, gravel, stone, fill material, clay used as fill material, earth, ash, marl, top soil and peat.
The mineral resources not included in this definition are:
Unconsolidated non-metallic substances are considered a capital asset and represent economic development opportunities for First Nations. Many reserves throughout Canada possess large volumes of such material in commercial quantities and in excess of their present and future local needs.
Several of these resources are used extensively on roads in asphalt and as a road base, and as components of concrete in the building and housing industry. Parties interested in accessing these resources must do so in consultation with First Nations and AANDC to arrange for permits or leases for removal of materials from reserve lands in accordance with the Indian Act and to provide fair equitable compensation to the affected First Nation in the form of rental fees and/or royalty monies. These compensatory monies are accrued to their revenue and capital trust accounts respectively.
Unconsolidated non-metallic substance deposits, commonly composed of sand and gravel material, can be measured by volume (e.g., in cubic metres, m3) or by weight (e.g., in metric tonnes, t). Deposit size should be reported by volume when possible, for consistency and can be estimated by multiplying its length, width and depth. The volume can vary in size from a few thousand cubic metres to several million cubic metres. To be of any commercial value however, the volume in the deposit would normally exceed 1,000,000 m3.
The following guide for development consideration uses high quality sand and gravel as an example and assumes nearby market accessibility. In order to better visualize the surface footprint of a sand and gravel operation, deposit volumes can be used to estimate the approximate affected surface area (indicated in hectares, below).
| Volume of deposit (m3) |
Suggested uses | Life span (years) |
Scale of development project | Affected area (hectares) |
|---|---|---|---|---|
| 1,000 - 10,000 | First Nation use | 1 - 3 | Small road maintenance | <1 |
| 10,000 - 100,000 | First Nation or commercial use | 1 - 5 | 10 km of basic road construction | 1 - 5 |
| 100,000 - 1,000,000 | Commercial use | 5 - 10 | Major road construction project, small commercial | 5 - 30 |
| 1,000,000+ | Commercial use | 10+ | Major commercial development | >30 |
The major participants in on-reserve unconsolidated non-metallic substances development are the proponent, the permittee/lessee, the First Nation and AANDC. In some cases, the proponent and permittee/lessee may in fact be the same person or company. In other cases, the proponent and permittee/lessee may be separate parties.
The proponent's responsibilities include, but are not limited to:
The permittee/lessee's responsibilities include, but are not limited to:
The First Nation's responsibilities include, but are not limited to:
AANDC's responsibilities include, but are not limited to:
The exploration, extraction or mining of minerals from reserve lands and commission of them to some other use is referred to as "disposition". In order to initiate development there are two disposition options: permit or lease, both of which require the consent of the First Nation. AANDC, as grantor, obtains consent of the Band council before granting a permit or lease.
AANDC uses, in general two sections of the Indian Act in the disposition of unconsolidated non-metallic substances:
Permits and leases for the disposition of unconsolidated non-metallic substances can be issued under various circumstances depending, generally, on the size of the deposit and the quantity of the material to be extracted. As a general rule permits are issued for projects of a shorter duration for smaller quantities of minerals. On the other hand, a lease is required in situations where the operations are taking place over longer periods of time; where there are large deposits and quantities to be extracted; and the proponent is seeking exclusive access to the land. Construction of permanent buildings is an example of when a lease is needed. Refer to Table 2 for further details.
Depending on the case complexity and particularities other sections of the Indian Act may apply. Refer to information below.
The "Operational Policy on the taking, disposition, and removal of non-metallic substances from reserves" dated November 1, 2000 (Appendix B) states the following:
Subsection 58(4)(b) permits may authorize the permittee to acquire non-exclusive interests in a reserve necessarily incidental to the taking of non-metallic substances. AANDC recognizes the importance of restricting access to these lands to protect the health and safety of the residents. It also recognizes the permittee's need for security of buildings, equipment and inventory of non-metallic minerals and the need to conduct his/her business in an efficient manner. The Department will only grant other non-exclusive interests in the land that are compatible with these concerns (e.g. supervised industrial or educational tours, etc.). These interests shall be explicitly specified in the terms and conditions of the permit and be consented by the BCR.
Subsection 28(2) of the Indian Act identifies specific provisions in the context of unconsolidated non-metallic substances developmentgranting to the permittee the right to use and occupy the permit area for all purposes necessary or reasonably incidental to the exercise of the right to extract, store and remove unconsolidated non-metallic substances. It may be used in combination with subsection 58(4)(b).
In situations where the taking of non-metallic substances from reserve lands is to occur on designated lands, the designation must have provisions enabling such rights and consistent with the primary scope of the designation.
Where an instrument issued under subsections 58(4)(b), 53(1) of the Indian Act authorizes the taking and disposition of non-metallic substances from a reserve, the instrument should include explicit authorization to the permittee/lessee and persons acting for or on behalf of the permittee/lessee, to remove those substances from the reserve from which they were taken.
An unconsolidated non-metallic substances permit cannot be issued under the Indian Mining Regulations because the unconsolidated non-metallic substances are not defined as a "mineral" under those regulations.
Table 2 below shows the essential mineral disposition authorities for unconsolidated non-metallic substances.
| Situation | Grant authority to use surface to explore and remove samples (only) | Grant authority to remove minerals | Grant authority to dispose of minerals | Grant authority to use land for a quarry, pit, mine | Comments |
|---|---|---|---|---|---|
| Mining by FN Council for FN use | No authority required, subject to prior encumbrances | No authority required if for the benefit of the entire membership | No authority required if for the benefit of the entire membership | No authority required if for the benefit of the entire membership | If does not benefit the entire membership ss. 58(4)(b) permit required |
| Mining by FN Council for sale | No authority required, subject to prior encumbrances | ss. 58(4)(b) permit | ss. 58(4)(b) permit | ss. 58(4)(b) permit | BCR required in all instances |
| Mining by third party, including FN Corporation for sale | ss. 28(2) permit (no authority to remove minerals) | ss. 58(4)(b) permit | ss. 58(4)(b) permit | ss. 28(2) with ss. 58(4)(b) permit where no major or permanent disruption of the land or permanent buildings | BCR required in all instances |
| Situation | Grant authority to use surface to explore and remove samples (only) | Grant authority to remove minerals | Grant authority to dispose of minerals | Grant authority to use land for a quarry, pit, mine | Comments |
|---|---|---|---|---|---|
| Mining by FN Council for FN use | No authority granted | ss. 58(4)(b) permit | ss. 58(4)(b) permit | No authority granted | BCR and CP approval required where authority granted Mineral disposition proceeds shared by FN and CP holder |
| Mining by FN Council for sale | No authority granted | ss. 58(4)(b) | ss.58(4)(b) | ss.58(4)(b) | BCR and CP approval required where authority granted Mineral disposition proceeds shared by FN and CP holder |
| Mining by third party, including FN Corporation for sale | ss.28(2) permit | ss. 58(4)(b) | ss. 58(4)(b) | ss. 58(3) lease | BCR and CP approval required in all instances. Mineral disposition proceeds shared by FN and CP holder |
| Mining by CP holder | No authority required | ss. 58(4)(b) | ss. 58(4)(b) | ss. 58(4)(b) | BCR required except for exploration Mineral disposition proceeds shared by FN and CP holder |
| Situation | Grant authority to use surface to explore and remove samples (only) | Grant authority to remove minerals | Grant authority to dispose of minerals | Grant authority to use land for a quarry, pit, mine | Comments |
|---|---|---|---|---|---|
| Mining by any party (an individual, a FN Corporation, a third party, a legal entity) |
ss. 53(1) lease or ss. 53(1)(b) permit | ss. 53(1) lease, where exclusive rights granted; ss.53(1)(b) permit where non-exclusive rights granted |
ss. 53(1) lease, where exclusive rights granted; ss.53(1)(b) permit where non-exclusive rights granted |
ss. 53(1) lease, exclusive rights granted, | For large projects, major disruptions to community, AANDC could use s. 18(2) to expropriate the CP holder, with BCR, and subject to compensation Leases and permits are subject to terms of the designation Exclusive rights = Where major disruption of the surface area or permanent buildings |
| Situation | Grant authority to use surface to explore and remove samples (only) | Grant authority to remove minerals | Grant authority to dispose of minerals | Grant authority to use land for a quarry, pit, mine | Comments |
|---|---|---|---|---|---|
| Mining by any party (an individual, a FN Corporation, a third party, a legal entity) |
Follow the rules mentioned on part 1 A and 1 B of this table | Community general information meeting convened by the FN Council and a majority vote of on and off reserve electors. Community receives independent legal and professional advice. |
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Note: On Band Land with pre-existent Designation a 53(1)(b) permit may be issued in accordance with the terms and conditions of the Designation.
The permittee/lessee is the registered legal company or the developer that will operate or contract out the operation of the pit. First Nation-owned companies can operate a pit, however the legal authority and responsibility between the First Nation and operator must be separate and distinct. The permit/lease is the contract between the company and the Crown which ensures that the interests of all First Nation members are addressed as required under the Indian Act.
There are several variations on how First Nations can become involved in unconsolidated non-metallic substances development. The following options are most common:
The issuing of an unconsolidated non-metallic substances permit/lease is a complex process that requires the input and participation of several AANDC regional staff. The lead role is bestowed to a Regional Land Management Officer. However some AANDC regions use a Natural Resources Officer in addition to a Land or Environment Officer. The Responsible Officer guides and is guided by First Nations to ensure that the intentions of the First Nations are clearly stated within the actual permit/lease issued.
AANDC regional offices issue unconsolidated non-metallic substances permits/leases at the request of First Nations and on their behalf. A Band Council Resolution is required to initiate the process.
Permits and leases must be issued in accordance with the AANDC "Operational Policy on the taking, disposition, and removal of non-metallic substances from reserves", effective November 1, 2000 (see Appendix B). Permits and leases function as a means of making an activity, which would otherwise attract penalties under s. 93 of the Indian Act lawful.
First Nations operating under Section 53/60 of the Indian Act's land management delegation of authority can approve unconsolidated non-metallic substances permits/leases.
In general terms, land/environment officers in the regional offices are responsible for:
For standards related to legal survey plans requirements refer to the Indian Lands Registration Manual, 2013.
Subsection 58(4)(b) of the Indian Act states:
Notwithstanding anything in this Act the Minister may, without an absolute surrender or a designation
(b) with the consent of the council of the band, dispose of sand, gravel, clay and other non-metallic substances on or under lands in a reserve, or, where that consent cannot be obtained without undue difficulty or delay, may issue temporary permits for the taking of sand, gravel, clay and other non-metallic substances on or under lands in a reserve, renewable only with the consent of the council of the band.
A ss. 58(4)(b) permit is normally used for the disposition of small volumes, usually when the cumulative volume of all deposits are estimated to be less than 100,000 cubic metres (excluding overburden) of unconsolidated non-metallic substances. The permit can be issued without a designation.
However the "Operational policy of the taking, disposition, and removal of non-metallic substances from reserves", November 1, 2000 allows using permits for larger volumes following specific procedures. As stated within this policy First Nations that do not wish to designate their unconsolidated non-metallic minerals under ss. 53 (1) lease are able to opt for a ss. 58(4)(b) permit plus a general information meeting. The policy requires that the general information meeting be convened by the Band Council and a majority of on and off-reserve electors of the Band receive independent legal and professional advice, consent to the project.
The ss. 58(4)(b) permit is used when:
A ss. 58(4)(b) cannot be issued for reserve lands which have been surrendered or designated.
An unconsolidated non-metallic substances permit has the following characteristics:
The AANDC Minister, through his delegated authority, issues unconsolidated non-metallic substances permits with council consent once all requirements have been satisfied. If the permit holder is a company owned by a First Nation, the legal authorities and responsibilities of the First Nation are separate and distinct from the permit holder.
The terms and conditions agreed to by the First Nation, the Minister and the permit holder are described in the permit. The First Nation determines when, where and who can develop unconsolidated non-metallic substances on its reserve.
Prior to a permit being issued, a Band Council Resolution (BCR) is obtained from the First Nation authorizing the Minister to issue a permit. The BCR must clearly state key points (i.e. reserve name, Permittee, term of the permit, volume of material to be removed, royalty rate, etc. and a standard statement: "The Council has read and understand the terms and conditions of the permit, and consents to the issuance of the permit"). To proceed without BCR will render the permit void.
The permit identifies the permit holder, the affected lands, the size and configuration of the permit area, its location, and the terms and conditions under which the permit is to be issued.
A typical permit should contain clauses dealing with such issues as:
A permit should be accompanied by several items, which include but are not limited to:
Stages in the issuance and implementation of a permit:
Graphic 1 below shows a flowchart of the permit issuing process.
This graphic describes general phases of the issuance of an unconsolidated non-metallic substances permit.
Step 1. The proponent consults the First Nation with regards to the proposed project. During this first step the Proponent approaches the First Nation indicating that he is interested in developing a sand and gravel resource extraction operation on their reserve. The proponent inquires if the First Nation wants to proceed with the project.
Step 2. The Proponent submits a proposal, including an Operational and Restoration Plan to the First Nation Council. If the First Nation agrees to the project then the Proponent prepares a proposal and an Operational and Restoration Plan of the project. These two documents, when ready are sent to the First Nation Council for review and approval.
Step 3. The First Nation Council submits a copy of the proposal together with the Operational and Restoration Plan to the appropriate AANDC regional office. The regional office verifies the application.
Step 4. The AANDC regional office provides comments on the proposal, relevant information and procedural requirements to the First Nation and the proponent. It is important that the First Nation has all the necessary and available information to make a sound decision.
Step 5. Provides two options to proceed:
Option 1. If the cumulative volume of all deposits is estimated to be less than 100,000 cubic metres the First Nation Council continues to assess the proposal, consults with the community members, and decides whether or not to proceed with the project development.
Option 2. Where the cumulative volume of all deposits is estimated to be greater than 100,000 cubic metres AANDC consults with the First Nation Council on whether it wishes to proceed by way of a permit or by way of a designation and lease.
If the First Nation agrees to pursue the project, and selects the option of regulating the extraction by way of a permit a general meeting be held by the First Nation Council. A majority of on and off-reserve electors, receiving independent legal and professional advice, should participate in the meeting. The purpose of the meeting is to inform the community on the proposed project and to approve proceeding by way of a permit.
If the First Nation Council chooses to go through a designation process they will proceed by way of a subsection 53(1) lease.
Step 6. The First Nation passes a Band Council Resolution (BCR) authorizing the Minister to issue a permit.
Step 7. The AANDC regional officer conducts an encumbrance check to ensure that no land use conflicts exist.
Step 8. The proposed permittee hires a consultant to undertake the appropriate environmental report for departmental review. The responsible departmental officer ensures that the environmental report is complete and makes a decision on the environmental review.
Step 9. The Proponent, the First Nation Council and the departmental representatives meet to negotiate terms and conditions of the permit.
Step 10. AANDC regional officials draft a permit on the basis of the negotiated terms and conditions and also review for compliance with the policy requirements.
Step 11. During the last step of the permit issuing process the permittee and the department sign the permit. The executed permit is registered in the Indian Lands Registry. If a CEAA 2012 Environmental Assessment is required, the assessment is registered in the Federal Environmental Assessment Registry. Originally executed copies of the permit are distributed to all parties inclusive to the First Nation.
Subsection 53(1) of the Indian Act states:
The Minister or a person appointed by the Minister for the purpose may, in accordance with this Act and the terms of the absolute surrender or designation, as the case may be,
(a) manage or sell absolutely surrendered lands; or
(b) manage, lease or carry out any other transaction affecting designated lands.
The disposition of large quantities of unconsolidated non-metallic substances from a reserve in which the cumulative volume of all deposits is estimated to be in excess of 100,000 cubic metres (excluding overburden) is recommended to be made through a ss. 53(1) lease. The removal of large volumes potentially causes a significant and permanent loss of, or diminished use of the surface of the reserve. For this reason it is necessary to designate, in accordance with the provisions of the Indian Act, the surface area that will be the subject of the lease, together with any access requirements. A designation means the surrender of any interest of the First Nation and its members in all or parts of the reserve land, that is not absolute, by a First Nation to Her Majesty for the purpose of land being leased or a right or interest being granted as permitted under ss. 38(2) of the Indian Act.
The First Nation submits a proposal to the AANDC regional office. Upon its verification and review by an Environmental Officer, any project exceeding the thresholds identified in s. 17 of the Regulations Designating Physical Activities under the Canadian Environmental Assessment Act 2012 then a federal environmental assessment (EA) needs to be completed in advance of a designation.
The proponent does need rights of access and rights to the surface sufficient to conduct operations, but there must also be a transfer of an interest in the unconsolidated non-metallic substances so as to allow for its sale. In this regard, the designation vote should also address the disposition and removal of non-renewable resources, in this case the unconsolidated non-metallic substances to be extracted by the proponent.
In situations when leasing occurs on locatee land the dispositions of Directive 5-2 of the AANDC Land Management Manual should be applied.
The process for leasing of land for the purposes of extracting unconsolidated non-metallic substances should follow the Directive 7-2, Leasing Reserve Lands Using Designation, of the Lands Management Manual. Directive 7-1 Leasing Reserve Land – An Overview, Chapter 2 and Chapter 5 of the above mentioned manual may also provide guidance with regard to leasing mechanisms and designation process.
Any AANDC Officer in the process of issuing a ss. 53(1) lease who encounters uncertainties regarding procedures, or uncertainties relating to the contents of a lease, or any other matter requiring clarification should approach the appropriate regional policy unit or to the Lands Directorate at headquarters or the Department of Justice for resolution.
The ss. 53(1) lease is used when:
A "ss. 53(1) lease" grants to the lessee a property interest in unconsolidated non-metallic substances and the exclusive right to extract those substances.
A lease identifies the lease holder or lessee/developer, the affected lands (the size and configuration of the leased area, legal land description, survey plans, textual description), and terms and conditions in which the lease is issued.
A ss. 53(1) lease has the following characteristics:
General steps to follow in granting a lease for the purpose of taking, disposing and removal of the non-consolidated non-metallic substances:
As stated above in chapter 4.5.1. Authority for Subsection 53(1) Leases, section 53(1)(b) of the Indian Act authorizes the Minister, or a person authorized by the Minister, to manage, lease, carry out any other transactions affecting designated lands.
Permits may be subject of ss. 53(1)(b), being implicitly understood and defined as "other transactions". These types of permits are issued in situations where the disposition of non-metallic substances from reserve lands is to occur on designated lands, the minerals have not been surrendered and when the cumulative volume of all deposits is estimated to be less than 100,000 cubic metres (excluding overburden). The designation must have provisions enabling such rights and in accordance with the primary scope of the designation. The permit issuing process will basically follow the same requirements and procedure as per chapter 4.4.4. Permit Process and Key Elements of the Permit.
The establishment of an unconsolidated non-metallic minerals operation on individual landholdings requires special consideration. In principle, there are two different ways of issuing permits and leases that are supported by the authority of two sections of the Indian Act, as detailed below. In determining which authorization to grant it is vital to first ascertain the extent of the physical impact on the lands and the volumes to be removed. In the situation where the disposition of the unconsolidated non-metallic minerals in which the cumulative volumes of all deposits is less than 100,000 cubic meters (excluding overburden) and is associated with a small impact on the lands, it is possible to proceed with a ss. 58(4)(b) permit.
In the situation that the disposition of the unconsolidated non-metallic minerals in which the cumulative volumes of all deposits is over 100,000 cubic metres (excluding overburden), with an extensive physical impact on the lands, then it is possible to proceed with a ss. 58(3) lease. In the event of large scale operations it is recommended that the First Nation membership be involved, and, that provided the band receives the appropriate share of the revenues generated by the operation, a designation of the minerals is not necessary. However it is, still, in the interest of the community that requiring a designation of unconsolidated non-metallic minerals made as a condition of the lease is the most prudent course of action.
Since reserve lands and often underlying minerals are ultimately held for the First Nations members as a whole, First Nations have the opportunity to express their views on the division of revenues derived from locatee lands. Revenues generated whether it is pursuant to a ss. 58(3) lease or a ss. 58(4)(b) permit must necessarily be shared between the C.P. holder and the First Nation as referenced in ss. 58(4) and ss. 58(5) of the Indian Act according to shares as convened by the First Nation membership. The division of revenues generated from surface rent, bonus, royalty and others is a matter for discussion between the First Nation and the locatee.
Alternatively, it is common practice that when particular reserve lands are intended to be developed to the benefit of the First Nation as a whole and those lands are held pursuant to a certificate of possession, negotiations are undertaken between the First Nation and the C.P. Holder for a transfer under sec. 24 of the Indian Act. In exchange for transferring his interest back to the First Nation the C.P. Holder usually receives some form of compensation (e.g. land and/or financial compensation).
The main objective of this guideline is to provide the affected First Nation with the opportunity to obtain optimal economic and socially beneficial returns as a direct result of this activity with minimal disruption to their lifestyle and environment. Therefore, when a permit or lease is issued, the following general terms and conditions related to financial aspects need to be considered. Although the Indian Mining Regulations do not apply, the regional officers should refer as guidance to the specific sections of these regulations when dealing with financial aspects of permitting or leasing.
In general the non-metallic minerals are subject to a fairly uniform administrative regime for all provinces/regions provided by AANDC, which allocates the non-metallic rights. The income from their extraction is collected by the federal government for the use and benefit of the First Nation.
The unconsolidated non-metallic substances are not subject to the federal-provincial mineral agreements (i.e., Natural Resources Transfer Agreements) which solely address the legal frameworks for administering the metallic minerals on reserves. However clay is identified under New-Brunswick's and Nova Scotia's agreements. Where no federal-provincial agreements exists, (i.e., Québec, Prince Edward Island and Northwest Territories) mineral title and rights need to be considered prior to any development.
First Nation initiatives towards the development of land use, planning and zoning by-laws are encouraged to optimize the opportunities for orderly resource development.
To ensure compliance with the Minister's responsibilities, the regional officer will be responsible for the necessary documentation and ensuring that any permit or lease issued is compliant in accordance with this guideline including the collection of any revenues. In addition, the responsible officer will investigate and report on all unconsolidated non-metallic substances disposals made with or without permits or leases to AANDC headquarters. There is no tender required, nor is any staking process involved.
A BCR requesting the issuance of a permit/lease will be submitted to the delegated AANDC officer, accompanied by a copy of the offer to extract and purchase non-metallic substances from First Nation lands, prior to issuing the permit/lease. A copy of the BCR will be attached to and form part of the permit/lease.
The proponent shall provide a geotechnical evaluation report to determine the viability and long term sustainability of unconsolidated non-metallic substances development projects on reserve land at the earliest possible stage of the process. This evaluation should be in accordance with the long term land use and resource planning in order to prevent or impede resource depletion as well as develop a mechanism to evaluate the environmental and social impacts that may result from this type of activity over a prolonged period of time. This also provides background data for more accurate assessments of potential future site development of minerals disposition on reserve land.
This evaluation will serve to inform the First Nations and their councils, as well as regional offices as to the extent of mineral resources available for commercial development and eventual sale in excess of that amount set aside for reserve use and development. Recommendations can then be made to the First Nation as to the safe commercially sustainable level of extraction at a fair royalty rate, an accurate description of the method(s) of extraction monitoring and the development of an operational and restoration plan the company will be providing.
Each application for a permit/lease for disposal of unconsolidated non-metallic substances must include an operational and restoration plan by following the Operational and Restoration Plan – Terms of Reference (see Appendix A).
Once agreed upon by the responsible officer and the proponent, the plan will be appended to the permit/lease as a schedule. The permittee's/lessee's obligations are clearly specified and criteria are established for assessing compliance with the terms of the permit/lease.
Restoration of land(s) from which unconsolidated non-metallic substances have been extracted may be considered separately from redevelopment. A particular source of substances might be used for many years and may be developed by more than one permittee/lessee over the course of the deposit's life span, though only by one party at a given time. In such cases, each permittee/lessee shall be required to use and restore the area in such a manner as to minimize the defacement of the land in accordance with the restoration plan and the potential cost of restoration for future use.
Removal of unconsolidated non-metallic substances may cause damage or defacement, physical or otherwise, to the permit/lease area and may include such things as:
Consequently, it should be noted that the occurrence of any of the points listed above will vastly depend on the methods and extent of extraction. Consideration must therefore be given to land-use plans for the permit/lease area and the surrounding lands before implementing the technical recommendations.
Removal operations should be undertaken in such ways as not to create unsafe conditions within the permit area and are the sole responsibility of the permittee/lessee. As a direct result of such responsibilities, the permittee/lessee is obliged to maintain sufficient insurance to protect the First Nation and the Crown from any and all litigation that may be pursued by party whose property has been damaged or who suffered a personal injury by an unauthorized entry into the permit/lease area. Concurrently, the First Nation shall indicate in the BCR that it will not assume any responsibility for any damage or injury complaints suffered within the permit/lease area not covered by the permittee/lessee agreement.
The permittee/lessee will conduct operations in compliance with all provincial, industry and/or local standards unless specifically stated otherwise in the permit or lease. Permittees/lessees will accept sole responsibility and liability for any damages and inconveniences caused to surrounding land owners by any activities conducted within the permit/lease area, whether authorized or not.
Surface rents are paid to Canada and placed in the First Nation's Revenue Account as compensation for the use of the land's surface area and are included in permit and/or lease agreements to cover the area required for on-reserve operations. Although no surface rent is required under the ss. 58(4)(b) of the Indian Act such charges can be negotiated stipulating that the proponent extracts only the identified non-metallic substances and not hold the land for other resources. All rents must be negotiated in good faith based on the most current market value of the utilized lands and the coverage area required for the operation. Surface rents are considered income and are accessible by the First Nations from their Revenue Accounts.
All royalties must be negotiated and based on the current local market value and provide for future redevelopment cost. Royalties are calculated by weight or volume of unconsolidated non-metallic substances removed and sold off reserve. Royalties can be paid at various intervals and must be accompanied by a statement of account showing the amount in weight or volume of minerals removed from the reserve within the specified time period. An annual statutory declaration by the permittee/lessee showing the total amount removed in previous years is also required as royalties result from a one-time sale of a resource (capital asset). Funds are deposited into the Band's Capital Trust Account.
On rare occasions, a bonus payment or royalty pre-payment may be negotiated. These payments are at times paid to Canada for deposit to the First Nation's Revenue Account in the form of one or more lump sum payments prior to signing for a permit/lease for a large scale unconsolidated non-metallic substances development, or, on an agreed schedule.
Occasionally, it is possible for a permittee/lessee to enter into a permit/lease agreement for unconsolidated non-metallic substances extraction from a First Nation's pit and subsequently have no minerals removed. To avoid this, a clause may be inserted in the agreement, requiring the operator to financially compensate the First Nation with a monthly or annual minimum royalty payment regardless of the amount of material removed and processed from the extraction site. The minimal royalties dispensed to the First Nation will then be deducted from the royalties paid for the actual production.
There are other ways to derive maximized benefits from a permit/lease. Frequently, a First Nation may choose to receive a volume of processed aggregate or road improvements or some other form of trade as payment in return for their unconsolidated non-metallic substances.
Security deposits in the form of money, bonds or promissory notes (letters of credit, safekeeping agreements etc.) payable to the Receiver General must be provided by the permittee/lessee to ensure there is money for site conservation and reclamation. Final drafts of the letters of credit and safekeeping agreements must be approved by the Minister prior to the ratification of the permit/lease. Usually the security deposits are negotiated at a rate of 10 to 20 percent of the estimated royalties payable. Security deposits are refundable upon termination of the permit provided that the permittee/lessee has complied with all the terms and conditions of the permit. Sections 11 and 12 of the Indian Mining Regulations may be consulted for guidance.
Regardless of the restoration method proposed, the permit/lease must contain a provision for the posting of a security deposit. This amount should be set at 10 to 20 percent of the maximum royalty expected. Security deposits shall be held by AANDC in safe custody and will be handled in accordance with the Financial Administration Act. These security deposits would be refundable upon evidence of satisfactory restoration of the affected lands as determined by the responsible officer in compliance with the agreement. Consequently, in the event of non-compliance with the terms and conditions of the permit/lease, the permittee/lessee would be liable, and the security deposit used to pay for works required.
The permittee/lessee must agree to indemnify and protect the Crown against all possible costs incurred from claims that may arise from the permittee's/lessee's activities on reserve. For this reason the purchase of public liability insurance needs to be made mandatory in order to protect the lessor and/or general public against any and all claims and/or litigation that may arise as a direct exposure to the benefits/risks and/or hazards stemming from proposals. As a result, this security measure is mandatory for all large scale mineral development projects.
Prior to a project being carried out determination must be made with respect to whether the project is likely to cause significant adverse environmental effects. AANDC shall identify those effects and include specific clauses in the permit/lease terms and conditions to ensure that all aspects related to environmental protection have been addressed.
The prospective permittee/lessee is required to submit environmental information (e.g. submission of a Project Description) to the AANDC regional office. The AANDC Environment Officer assesses and determines if the proposed project is a designated project under the Regulations Designating Physical Activitiesof the Canadian Environmental Assessment Act 2012.If the project exceeds the thresholds identified in s. 17 ofthe above mentioned regulationsthan a federal environmental assessment (EA) needs to be completed. A description of the AANDC's environmental review process is provided in the Proponents' Guide to Aboriginal Affairs and Northern Development Canada's Environmental Review Process (August 9, 2013, draft).
Detrimental effects that may result from the disposition of unconsolidated non-metallic substances include but are not limited to:
Many of these complications can be avoided or their effects considerably diminished by utilising good project planning, appropriate operational procedures, and by performing proper site restoration. For instance, a fence surrounding the pit and a gate at the perimeter can considerably reduce safety hazards. Noise problems can be managed by scheduling work for particular periods of the day. A suitable after-use for the area should be identified during the early stages of planning an operation, and restoration should be aimed at preparing for that after-use.
In environmental assessments/reviews of unconsolidated non-metallic substances pits, the developer must consider the following effects of excavation of the projects on:
AANDC measures environmental impacts based on:
The proponent's operational and restoration plan describes the potential impact of an operation on a reserve and its surrounding lands. The operation portion of the plan details the proposed site(s) and extraction methods, including:
The restoration portion includes plans for:
The First Nation community will want to ensure that its environmental concerns are properly identified and addressed in the operational and restoration plan. AANDC, provincial departments of transportation and natural resources and many private-sector consultants may provide environmental expertise and assistance.
At stated intervals or upon permit/lease expiration, the permittee/lessee will provide a statutory declaration detailing the volume of minerals removed, royalties paid or details as set out in the permit/lease.
Inspections of the mineral project are to be conducted by representatives of the affected First Nation and AANDC personnel. If conditions of the excavation site and restoration process are not deemed to adequately satisfy the set requirements of the agreement, the permittee/lessee will be served notice of said breach of the agreement and directed to cease all operations until a resolution is provided to the satisfaction of AANDC and the affected First Nation.
If restoration of the affected lands is deemed unsatisfactory upon final inspection, the security deposit will be withheld and the permittee/lessee will be required to complete the restoration and incur any and all additional expenses. The security deposit is returned only after satisfactory restoration has been completed. Should the restoration work being not completed according to the Operational and Restoration Plan, the security deposit may be used to pay for such work.
The fully executed permit or lease including the designation document, if applicable, must be registered in theIndian Lands Registry System at the AANDC's regional office. The permit or lease must also be recorded in the department's "NetLands" system.
Unconsolidated non-metallic substances development may also provide employment opportunities for First Nation members in business, management, geology, engineering and mechanical and related fields. Heavy equipment operators and drivers will also be in demand. Employment positions need to reflect the current rate being paid for off-reserve employees, and if required proper training should be provided.
Regional offices shall, upon request from Lands and Economic Development, AANDC Headquarters, report annually the quantity (by volume, in cubic metres) of unconsolidated non-metallic substances extracted and associated financial details including royalties and rental fees collected for each permit/lease active during the previous fiscal year. These data are to be collected for statistical purposes. This request will occur following the close of each fiscal year.
It is the responsibility of the responsible officer to ensure that any proceeds resulting from the disposition of a non-renewable resource such as unconsolidated non-metallic substances, to the best of the officer's knowledge, are accounted for in the First Nation's Revenue and/or Capital Trust Accounts. These monies must be deposited as per the requirements of the Financial Administration Act.
Revenues generated as a result of the use of surface land, such as rental, are Indian monies to be credited to the First Nation Revenue Trust Account.
Revenues generated by the disposition of unconsolidated non-metallic substances such as bonuses and royalties, are Indian monies and, per section 62 of the Indian Act, are capital monies to be credited to the First Nation Capital Trust Account.
The permittee/lessee shallpay all taxes, levies, etc., that may be payable to any authority as a result of the use and occupation of land within a reserve.
For information on this guideline or to obtain any of the above-noted references, please contact:
Postal Address:
Aboriginal Affairs and Northern Development Canada
Lands and Environmental Management Branch
Terrasses de la Chaudière
10 Wellington, North Tower
Gatineau, Québec
(Ottawa, Ontario)
K1A 0H4
Email: InfoPubs@aadnc-aandc.gc.ca
Phone: (toll-free) 1-800-567-9604
Fax: 1-866-817-3977
TTY: (toll-free) 1-866-553-0554
For more information or direction regarding the requirements for permit or lease applications please contact the AANDC's regional offices.
The prospective permit/lease holder is obligated to submit to the responsible AANDC representative and the affected First Nation a detailed report of their proposed Operational and Restoration Plan outlining in detail their intended operations on the affected lands. The following outline will serve as a guide to assist in the preparation of this first requirement of the permit/lease issuance process. Address only those items which relate to your particular unconsolidated non-metallic substances pit operations. Use photographs, plans, maps and charts where possible. It is recommended that the Operational and Restoration Plan be prepared by a Registered Professional Geoscientist or Engineer.
The proponent is obligated to restore and beautify reserve lands disturbed by mining development. The restoration plan component presents a detailed description of how the company will meet this obligation. The proponent must address all potential or anticipated environmental implications that may arise from excavation activities on reserve land as well as indicate the remedial measures it intends to implement to lessen or correct the impact on these lands.
Upon completion of the agreement a site inspection will be performed and if the restoration and/or site conditions are deemed unacceptable, the operator will be required to provide corrective action to remedy the situation.
1.1 To establish a revised departmental operational policy (the "policy") on the taking of non-metallic substances from land in a reserve, the disposition of these substances and their removal from a reserve.
The policy outlined in this directive is applicable to regional staff responsible for carrying out functions of Lands and Trust Services.
Indian Act
Indian Mining Regulations
Indian Oil and Gas Act
The policy directive is issued under the authority of the Assistant Deputy Minister, Lands and Trust Services.
"Non-metallic substances" include sand, gravel, clay, earth, ash, marl, peat, limestone, gypsum, granite, diamond, coal, placer deposits of non-metallic minerals, hydrocarbons not produced from a well in liquid form, and other non-metallic substances, but do not include (1) "oil" and "gas" as defined in the Indian Oil and Gas Act, and (2) naturally occurring metallic substances and rock containing those substances.
A "subsection 58(4)(b) permit" is a written document issued under authority of subsection 58(4)(b) of the Indian Act and which authorizes a person, including a corporation or other legal entity, to (1) take non-metallic substances from land in a reserve and dispose of these substances, and (2) acquire a non-exclusive interest in land in a reserve necessarily incidental to the taking of non-metallic substances from land in a reserve.
A "subsection 58(4)(b) permit" cannot be issued where (1) lands have been designated, since "subsection 58(4)(b) permits" can be issued only on reserve lands, which are defined in the Indian Act to not include designated lands for the purposes of section 58 of the Indian Act, or (2) where the minerals have been surrendered.
A "subsection 58(4)(b) permit" cannot be issued for reserve lands which have been surrendered or designated.
Where a person seeks to take non-metallic substances from an Indian Reserve in which the cumulative volume of all deposits is estimated to be less than 100,000 cubic metres (excluding overburden), the Department of Indian Affairs and Northern Development (DIAND) may issue a "subsection 58(4)(b) permit" with the consent of the Band Council.
Where a person seeks to take non-metallic substances from an Indian Reserve in which the cumulative volume of all deposits is estimated to be in excess of 100,000 cubic metres (excluding overburden) thereby potentially causing a significant and permanent loss of, or diminished use of the surface of the reserve, DIAND will consult with the Band Council whether it wishes to proceed through a "subsection 58(4)(b) permit" or through a designation of the surface and a surrender of the minerals.
Where the Band Council chooses to proceed by way of a "subsection 58(4)(b) permit", DIAND may issue a "subsection 58(4)(b) permit" where (1) the Band Council and (2) the majority of on and off reserve electors of the First Nation at a general meeting of the Band convened by the Band Council have received independent legal and professional advice and have consented to the project.
At the general meeting the electors shall be informed about:
Non-resident electors shall be advised about the date, time, location, and purpose of the general meeting, and shall be allowed to express their views about the project in accordance with DIAND policy respecting non-resident voters and their eligibility to participate and vote at such meetings.
If the Band Council refuses to convene a general meeting, DIAND will consider the Band Council's reasons for not convening a general meeting. If DIAND considers the reasons valid, it will issue a "subsection 58(4)(b) permit" if it has obtained a release from the Band Council developed with independent legal advice that it will not hold the federal government liable at law for the issuance of a "subsection 58(4)(b) permit". Without such a release, DIAND officials shall not issue a "subsection 58(4)(b) permit". The inconvenience and cost of holding a general meeting is not a valid reason for not holding a general meeting to ascertain the views of Band membership of the proposal.
"Subsection 58(4)(b) permits" may authorize the permit holder to acquire non-exclusive interests in a reserve necessarily incidental to the taking of non-metallic substances. DIAND recognizes the importance of restricting access to these lands to protect the heath and safety of the residents. It also recognizes the permittee's need for security of buildings, equipment and inventory of non-metallic minerals and the need to conduct his/her business in an efficient manner. DIAND will only grant other nonexclusive interests in the land that are compatible with these concerns (e.g. supervised industrial or educational tours, etc.). Where the intent is to grant a permit holder a non-exclusive interest in a reserve, that interest shall be explicitly granted in the "subsection 58(4)(b) permit" and the terms and conditions of the grant of the interest shall be specified.
Where the taking of non-metallic
substances from lands in a reserve is to
occur on designated lands, the
designation shall make provision for the
taking of non-metallic substances from
the designated lands and for their
disposition.
Where the taking of non-metallic substances is to occur on lands where the minerals have been surrendered and the federal government has jurisdiction over the surrendered minerals, two situations may arise:
Where an instrument issued under subsections 58(4)(b) or 53(1) of the Indian Act or subsections 5(2) or 6(1) of the Indian Mining Regulations authorizes the taking and disposition of non-metallic substances from a reserve, the instrument should include explicit authorization to the instrument holder and persons acting for or on behalf of the instrument holder, to remove those substances from the reserve from which they were taken. This allows the instrument holder, and the holder's contractors and employees, to remove the non-metallic substances from the reserve without committing an offence under section 93 of the Indian Act.
To provide guidance and direction to regional staff dealing with requests concerning the taking, disposition and removal of non-metallic substances from reserves.
Regional Director, Lands and Trust Services or those responsible for administering the taking, disposal and removal of non-metallic substances from reserves, may implement and enforce this policy starting November 1, 2000, in consultation with First Nations wishing to be governed by the provisions set out herein.
Enquiries regarding this policy may be
addressed to the Director, Environment
and Natural Resources, Lands and Trust
Services, Headquarters. Prepared by:
Environment and Natural Resources
Directorate
Lands and Environment Branch
Lands and Trust Services
Warren Johnson
A/Assistant Deputy Minister
Lands and Trust Services
The following Acts, Regulations, Policies, etc., available online via the Department of Justice or on the applicable Ministry/Department's website, may be relevant to unconsolidated non-metallic substances development projects:
Acknowledging the contribution of the following departmental resources to the writing of this document: