In the face of growing global pressure for greater corporate
transparency, the Government of Canada announced today that it will
establish new mandatory reporting standards for Canadian extractive
companies to improve transparency of the payments they make to
governments worldwide. The new reporting regime will be established
with a view to ensuring that Canada's reporting framework is
consistent with existing international standards and aligned with
other G-8 countries.
A number of jurisdictions have already moved to mandatory
disclosure of payments to governments. In August, 2012, the U.S.
Securities and Exchange Commission adopted new reporting rules
under the Dodd-Frank Act that require publicly listed oil,
gas and mining companies to file an annual report disclosing
payments to governments (e.g., taxes, royalties, licence
fees, payments for infrastructure, etc.) on a project-by-project
basis. The European Parliament approved today similar transparency
This global trend toward a regulated approach to disclosure
builds on the existing voluntary efforts that industry and
governments (including Canada) have undertaken over the past decade
in the Extractive Industries Transparency Initiative. However, a
mandatory framework is expected to produce more consistent and
reliable data and ensure a level playing field for Canadian
extractive companies operating domestically and abroad.
The federal government's announcement is supported by the
Mining Association of Canada, the Prospectors and Developers
Association of Canada and two non-governmental organizations who
formed the Resource Revenue Transparency Working Group and lobbied
for mandatory "publish what you pay" rules in Canada.
Later this week, the working group is expected to release its draft
framework for provincial securities regulators to enforce
transparency provisions for the mining sector, including
project-by-project payments to all governments, whether domestic or
foreign. The working group believes that it is particularly
important that Canada adopt a mandatory framework because the
Toronto Stock Exchange and TSX Venture Exchange are home to so many
of the world's publicly listed mining companies. The draft
framework is expected to cover not only major producing companies,
but also junior miners listed in Canada, many of which have
exploration or development properties in places like Africa, South
America and Southeast Asia. We expect that this draft framework
will be considered by the federal government in the development of
its new reporting regime.
At present, it is not clear whether the federal government will
ultimately favour a provincial securities approach as opposed to a
federal reporting regime. As well, it is not clear whether the
federal government will require disclosure of what are now
commonplace impact and benefit payments by the extractive industry
to Aboriginal communities. The federal government has simply said
that, over the coming months, it will work with the provinces,
territories, Aboriginal communities, industry and civil society
groups to develop the new mandatory reporting regime.
Davies Ward Phillips & Vineberg LLP is an integrated
firm of more than 240 lawyers with offices in Toronto,
Montréal and New York. The firm is focused on business law
and is consistently at the heart of the largest and most complex
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Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
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