Opinion: B.C. court ruling increases uncertainty and threatens mining investment

Written for BCBusiness by Julio Mejia and Elmira Aliakbari, analysts at the Fraser Institute.

According to a recent B.C. Court of Appeal decision, British Columbia’s mineral claim system conflicts with the province’s Declaration on the Rights of Indigenous Peoples Act (DRIPA) because it allows claims on Indigenous lands without prior consultation with First Nations. This court ruling further increases uncertainty about private property rights in B.C. and may further deter investment in the province’s already struggling economy.

Under DRIPA, which the Horgan government passed in 2019, the B.C. government must take “all measures necessary” to ensure B.C.’s laws align with the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), which affirms Indigenous rights to land, territory and resources.

Under the current legal framework, mining companies can register online claims on Crown land without approval from or consultation with Indigenous peoples. Holding a claim gives the miner exclusive rights to explore that land area. But if miners must first obtain Indigenous approval before claims can proceed, as implied by the court’s interpretation of DRIPA, they may decide to spend their time and resources elsewhere.

In response to the court decision, the Eby government has promised to amend DRIPA, but according to Michael Goehring, head of the Mining Association of BC, the court decision will “result in more litigation and unprecedented uncertainty that will negatively affect B.C.’s investment climate.”

And this week, the Association for Mineral Exploration (AME), the industry’s largest advocacy organization in B.C., called on the Eby government to amend DRIPA, which in its “current form” is “completely unworkable and detrimental to our sector and the overall economy of British Columbia.”

And this comes on top of an already uncertain regulatory environment. Mining companies in B.C. have long grappled with uncertainty around property rights and land ownership, something consistently reported in our annual survey of mining investors, which evaluates jurisdictions based on mineral potential and government policies. According to the latest survey, 76 per cent of respondents for B.C. said uncertainty over disputed land claims deters investment compared with 44 per cent for Saskatchewan. Moreover, 36 per cent of respondents for B.C. reported permit wait times exceeding seven months—the second-longest among all provinces. And 62 per cent of B.C. respondents said that permit approval times have either “somewhat” or “considerably” lengthened over the past decade.

Consequently, despite ranking 4^th globally for mineral endowment, B.C. ranked only 32^nd out of 82 jurisdictions for government policy, making it the third-worst performing province in the survey, ahead of only Manitoba (43^rd) and Nova Scotia (76^th).

Again, if the government adopts the court ruling and requires miners to obtain Indigenous “consent,” mining companies, which already struggle with the province’s lengthy permit approval process, may simply look elsewhere to invest.

And the timing could hardly be worse. Nominal investment in B.C.’s mining sector is already falling, from $2.5 billion in 2023 to a projected $2.1 billion in 2025—a 19 per cent decline. Less investment reduces the number of viable mining projects, stifles job creation and reduce economic opportunities for all British Columbians, including First Nations. Indeed, the mining sector is one of the largest employers of Indigenous peoples. In 2022, 150 First Nations-affiliated businesses sold $520 million in goods and services to mining operations in B.C. And according to Mansfield Consulting, an independent consulting firm, new mining projects could increase that number to $1.4 billion annually.

B.C.’s Court of Appeal ruling only increases uncertainty about property rights and threatens an industry that plays a key role in supporting communities across the province.