Prime Minister Stephen Harper announced on June 12, 2013 that
Canada has committed to adopting a G8 initiative establishing a
mandatory foreign-payment disclosure regime for the resources
industry. This mandate will require Canadian extractive companies
to publicaly disclose any payments made to foreign governments in
exchange for a benefit, such as a contract or permission to operate
in that country.
Canada is following the lead of several other countries, such as
the United States, those in the European Union and Hong Kong which
already require the extractive industry to report taxes, royalties
and other fees paid to foreign governments. The U.S. reporting
rules were adopted in 2012 by the U.S. Securities and Exchange
Commission under the Dodd-Frank Wall Street Reform and Consumer
Protection Act, however the E.U.'s directive has yet to be
Further, The Extractive Industries Transparency Initiative
already has a disclosure framework where currently 23 countries
voluntarily disclose payments to governments, and governments
disclose the money they receive. The figures are then audited
independently to detect any discrepancies.
The details of the new Canadian regime, including how mandatory
reporting would be enforced, what penalties would attach for
non-compliance and whether the provincial securities regulators
would be involved, have yet to be determined. Over the next two
years, the federal government intends to work with the provinces,
industry, aboriginal groups and civil society organizations to
develop the reporting framework.
The Canadian government has also stated that it is aware of the
industry concern that inconsistencies and complexities may arise as
between countries which adopt this initiative, potentially creating
voluminous reporting and contradictions. This concern creates a
push for a global standard that levels inconsistencies between
countries and avoids burdening companies with too much extra
The Canadian extractive industry is a major global player
accounting for sixty percent of the world's mining and
exploration companies with thirty-five percent of all oil and gas
companies being listed on Canadian stock exchanges. This new
mandatory reporting regime is the Government of Canada's next
step in supporting the global effort to fight corruption and
The foregoing provides only an overview. Readers are
cautioned against making any decisions based on this material
alone. Rather, a qualified lawyer should be consulted.
While that agreement mandated export measures on Canadian softwood lumber exports destined for the United States, it also protected those lumber exports from the potential imposition of onerous import measures by the U.S.
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