Sitting on a Gold Mine: Expropriation for Mining Purposes in Canada
1/9/2014 11:29 AM
An expropriation from a landowner by the government typically involves the taking of privately-held land for a public purpose, such as the building of roads or improvements to existing roads, acquiring land for municipal expansion, acquiring land or an interest in land for the construction of public buildings, and so forth.
However, there are instances where a private entity such as a corporation can become an “expropriating authority” with the right to take privately-held land and have it vested in the corporation. Mining is an example where a private corporation can become an authority with the right to expropriate land from a landowner who does not agree to sell.
In resource-rich Canada, where there exist valuable minerals below the surface of privately-held land, ownership of the minerals is vested in the Crown and not the landowner. Each province in Canada has a legislative mechanism to allow individuals or companies in the business of mining to both prospect for and eventually extract the Crown-owned minerals by means of a license to explore and conduct testing to locate the minerals. The individual or company may then lease the rights to extract the minerals, subject to the government’s right to royalties.
Where the minerals are beneath privately-owned land, the landowner has the right to be compensated for the interference with their land, and to take disputes with respect to compensation for their land to the provincially-appointed authority to determine compensation.
In Nova Scotia, where the landowner does not willingly sell his or her land to a mining company who has obtained a lease to the mineral rights, the mining company can apply pursuant to the Mineral Resource Act seeking a vesting order to take title of the land from the landowner and place it in the mining company. At that point, the procedure becomes an expropriation triggering the Nova Scotia Expropriation Act and its compensation provisions. The lessee mining company becomes the expropriating authority: an interesting example of when expropriation can take place by a corporation rather than by the government directly.
If you have questions or would like to discuss this topic further, please contact Alison Morgan at Patterson Law at 1-888-897-2001.
Please note that this article is meant to provide information only and is not intended to confer legal advice or opinion. If you have any further questions please consult a lawyer. Please note as well that many of the statements are general principles which may vary on a case by case basis.