On January 16, 2014 the Resource Revenue Transparency Working Group (Working Group) released final recommendations on mandatory transparency standards for mining companies trading on Canadian stock exchanges. These standards would require companies to publicly disclose payments made to foreign governments.
The Working Group consists of the Mining Association of Canada, the Prospectors & Developers Association of Canada, Publish What You Pay Canada and the Revenue Watch Institute.
The Working Group listed a number of recommendations, including:
- Mining companies must disclose the mining project associated with the payments.
- Companies should report payments by their subsidiaries, as well as any joint venture or associate entities.
- Payments should be disclosed over the project's entire life (i.e. from exploration to remediation).
- The threshold for the value of payments is $100,000 for TSX-listed companies, and $10,000 for TSX Venture Exchange-listed companies, the latter thereby capturing the many junior mining companies listed in Canada. How the federal government will implement these disclosure requirements is unclear although presumably the hope is that it can be effected through the CSA.
- The types of payments covered under the recommendations include: royalties, profit taxes, dividends, bonuses, production entitlements, transportation and infrastructure payments.
The next challenge in enacting these new standards will be implementing them within all the provinces absent a national securities regulator. The Canadian government has indicated that it will nevertheless forge ahead in implementing the disclosure requirements if the provincial governments do not act by April 2015.
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