Closing time: a guide to the mine closure plan in Canada

In mining operations, the real work doesn’t end when the last ore is extracted. Canadian law requires every mining company to file a mine closure plan – a document that sets out exactly how the company must clean up, restore, and return the land it used.

This guide covers what a mine closure plan is, what it should contain, and where lawyers come in. For other related topics, you can also reach out to a Lexpert-ranked mining lawyer.

What is a mine closure plan?

Mine closure plans are a legal prerequisite to obtaining mining permits across Canada, with requirements set by the provinces and territories. A mine closure plan is a formal legal document that outlines how a mining company:

• will decommission its operations
• restore the land it disturbed

Specific activities it covers include:

• buildings and equipment removal
• tailings management
• post-closure monitoring
• contaminated water management
• open pits stabilization
• vegetation replanting
• management of environmental liabilities

The following video offers an overview of an actual mine closure plan from a site in the Northwest Territories:

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Federal and provincial laws governing a mine closure plan

Provincial and territorial jurisdiction governs the primary regulation of mine closure and reclamation in Canada. The federal government plays a complementary role through the Impact Assessment Act (IAA), the Fisheries Act, and other federal laws, even though provincial and territorial law substantially governs the exploration, development, extraction, reclamation, and closure of mine sites.

As such, the requirements for mine closure plans vary across provinces. The provincial laws that governing mine closure plans include:

• Ontario: the Mining Act and the regulations on Rehabilitation of Lands under the Mining Act (Ontario Regulation 35/24)
• British Columbia: the BC Mines Act and the Health, Safety and Reclamation Code for Mines in British Columbia (BC Code)
• Alberta: the Mines and Minerals Act and the Environmental Protection and Enhancement Act (EPEA)
• Québec: the Mining Act, which was most recently amended by An Act to amend the Mining Act

At the federal level, the IAA applies to designated projects and may trigger a federal impact assessment process. For mines situated in or near fish-bearing waters, or those involving effluent discharge, the Fisheries Act and the Metal and Diamond Mining Effluent Regulations may also impose additional obligations.

Here’s another video which shows how a mine closure plan works:

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What are mining companies’ legal obligations for a mine closure plan?

Mining companies in Canada carry a long list of legal obligations for closing a mine. These obligations do not begin at the end of a mine’s life; they begin before the first shovel hits the ground.

File a mine closure plan before starting operations

The most basic obligation is also the most non-negotiable: a mining company must have an approved closure plan before it begins operating.

Some provincial laws are explicit in this prerequisite. In Nunavut, for instance, the interim abandonment and restoration plan must be submitted together with applications for surface leases. This allows abandonment and progressive reclamation activities to be planned for each phase of the operation.

No province or territory in Canada will issue a mining company a permit to start their operations without a mine closure plan in place.

Post financial security as part of the plan

Filing a closure plan is only half of the requirement. Mining companies must also post financial security to cover the full estimated cost of carrying out the closure plan. The purpose of this security is straightforward: if a company becomes insolvent, walks away, or simply refuses to do the work, the government can use the posted funds to hire a third party to complete the reclamation.

The amount of the security may vary, depending on the province or territory:

• Québec: the financial guarantee must equal the total estimated reclamation costs for the entire mine site, and the government may require the full amount upon approval of the closure plan
• Nunavut: the security must be equal to the total outstanding reclamation liability for the lands and waters on the mining site, and it must be based on the cost of having a third-party contractor do the work

The form of the security also depends on what the law permits. Aside from cash, acceptable forms of financial assurance in Ontario include:

• letter of credit from a Schedule I or II bank under the Bank Act
• surety bond from an approved guarantee company
• mining reclamation trust as defined in the Income Tax Act

This security may be returned to the mining company once certain legal conditions are met, or as indicated in the plan. In British Columbia, the security is returned only if:

• the mine site has been reclaimed to a satisfactory standard
• there are no remaining monitoring or maintenance requirements

In practice, financial assurance may be held for many years, or even decades, after a mine ceases operations.

Accept liability under the “polluter pays” principle

Across Canadian jurisdictions, the “polluter pays” principle applies to mine closure. Under this principle, the company responsible for the mining is also responsible for the cleanup.

The mining company’s responsibility does not disappear if something goes wrong during or after reclamation. A company’s obligation to reclaim the land does not affect its separate liability for remediation if additional environmental complications arise during the process.

This means that reclamation and remediation are two distinct obligations that can run at the same time. In short, a company working through its closure plan can still be held legally responsible for a new contamination on the same site.

What must a mine closure plan contain?

While the specific content requirements may vary by province or territory, most mine closure plans share some common structures and must address the following areas:

• pre-development conditions: a description of baseline environmental conditions before mining operations began, establishing the reference point for reclamation and post-closure monitoring
• land reclamation strategy: a plan for restoring the disturbed land to a safe and stable condition, ideally to its pre-mining state
• water and tailings management: plans for managing tailings storage facilities after closure and addressing any water treatment requirements that will persist post-closure
• infrastructure decommissioning: plans for the demolition or stabilization of processing facilities, waste dumps, access roads, and other infrastructure
• closure cost estimate: a detailed, independently verifiable estimate of the total cost of carrying out the closure plan, which must be reviewed annually
• financial assurance: the mechanism that will guarantee the funding of the closure plan
• stakeholder and Indigenous engagement: documentation of consultation with communities, Indigenous Peoples, First Nations, and regulators on the closure and post-closure land use
• post-closure monitoring program: a description of how the site will be monitored after closure, who is responsible for the monitoring, and for how long

How can lawyers help clients regarding a mine closure plan?

Beyond drafting, reviewing, and implementing a mine closure plan, mining lawyers can help clients in the following ways:

• regularly updating the plan: regulators require the closure plan to be reviewed and updated to reflect changing environmental conditions, with cost estimates revised in line with regulatory updates. Updates should occur at least every five years, or whenever there is a significant change to the mine plan or the mine’s circumstances
• meeting reporting obligations: these obligations apply both during operations and at closure. For example, Nunavut mining operators must notify the Chief Inspector of Mines. In British Columbia, every mine site must submit an Annual Reclamation Report to the Chief Inspector by March 31 each year

Mine closure plan: A mine’s closing time, but not its obligations

Every mine has a last day, yet the question is not whether closure will come, but whether the mining company is ready for it when it does. A mine closure plan is Canada’s way of making sure the lights go out responsibly: that the land is restored, the water is clean, and the people who live there are not left holding the bill.

Whether you are a mining company trying to stay compliant, or a community member who wants to understand your rights, the details of a mine closure plan matter. While getting it wrong can mean regulatory penalties, getting it right starts with the perfect legal advice, which you can find from Canada’s leading mining lawyers and law firms.

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