Canada: Transparency Recommendations Released For Disclosing Canadian Mining Company Payments To Governments

On January 16, 2014, the Resource Revenue Transparency Working Group (the Working Group) released its final recommendations for the creation of mandatory transparency standards that would see mining companies publicly traded on Canadian stock exchanges publicly disclose payments to governments.

The Working Group, consisting of the Mining Association of Canada, the Prospectors & Developers Association of Canada, Publish What You Pay Canada and the Revenue Watch Institute, was formed in September 2012 with the objective of improving transparency in the mining sector in Canada and overseas. Our legal update from June 2013 provides an overview of the Working Group's background and the international movement toward increased disclosure.

The group's final recommendations will weigh heavily on legislators, who are expected to introduce legislation for mandatory reporting in 2014.

This update will outline the Working Group's recommendations. Public issuers in the mining industry should expect that such recommendations will become part of their disclosure requirements in the near future.

Scope of reporting

The Working Group's recommendations are for all reporting issuers, as defined under Canadian securities law, to publicly disclose certain categories of payments made to national and sub-national authorities, including states, provinces, counties, districts, municipalities and state-owned enterprises. In addition, companies will need to detail the mining project to which these payments are associated.

To increase the complexity of this issue, the Canadian government's announcement to develop mandatory payment transparency standards includes a commitment to require the disclosure of payments to First Nations self-governments. The Working Group did not address this issue in its recommendations; however, it promises to be an area of contention as the federal government moves forward with its commitment.


In its draft recommendations, the Working Group included references to the relationships between parent and subsidiary companies, recognizing that public mining companies often hold projects by way of subsidiary companies. The final recommendations have refined this relationship to require reporting by all companies, their subsidiaries and jointly controlled and/or associated entities. The Working Group's recommendations rely on definitions of control outlined in the International Financial Reporting Standards and require that companies report on entities under their control, joint control, and to which they exert significant influence, to the extent that the company is able to access this information.

When to disclose

The Working Group's recommendations suggest that payments should be disclosed over the life of the project—from exploration to remediation—and over the value chain of the project, from exploration to export. This recommendation is specifically designed to capture environmental remediation payments, paid after a company may have sold or relinquished its interest in a given project.

What to disclose

The categories of payments have stayed consistent from the draft recommendations, with the notable exception of the removal of fines and penalties. The payment categories outlined in the recommendations align with those in section 1504 of the Dodd-Frank Act, the accounting and transparency directive in the EU and the Extractive Industries Transparency Initiative, with the addition of one payment category: transportation and terminal operation fees. The final categories of payments recommended by the Working Group are as follows:

  • Profit taxes (including profit, income and production taxes);
  • Royalties (including royalties-in-kind);
  • Production entitlements (by value and volume);
  • Bonuses (including signature, discover and production bonuses);
  • Dividends (i.e., withholding tax);
  • Infrastructure payments as required by law or contract (e.g., construction of a road or railway); and
  • Transportation and terminal operations fees.

The value threshold for any of the above-noted payments has been set at $100,000 for companies trading on the Toronto Stock Exchange and $10,000 for companies on the TSX Venture Exchange. The addition of the lower threshold for junior mining companies marks a departure from both the Dodd-Frank Act and the EU requirements, which set the minimum threshold at $100,000.

The Working Group noted this was to ensure the "made in Canada" approach included a lower threshold for junior mining companies, which comprise a large portion of Canadian public mining companies. When companies are calculating whether a payment is to be disclosed or not, they should keep in mind the payments are on a "disaggregated" basis, meaning if a TSX Venture issuer makes a singular payment of more than $10,000, or a series of related payments (such as a lease), of more than $10,000, then that payment is to be disclosed.

Form and forum of disclosure

Following the release of its draft recommendations, the Working Group received comments on both the form and forum of disclosure. In response, the final recommendations include a new section on the form of disclosure, namely that companies shall disclose their payments on a separate form, to be filed on SEDAR, on an annual basis. By requiring a separate form to meet the suggested disclosure requirements, companies will not have to include payment disclosure in a prospectus or other offering document, thus mitigating any risk of payment disclosure causing delay in public offerings.

The venue of payment disclosure is both the Working Group's and the federal government's next challenge. The Working Group recommends that the venue for payment disclosure be within provincial securities requirements. It recognizes the challenge inherent to passing a new disclosure requirement without a national securities regulator, but cites the Canadian Securities Administrators' past successes in developing national instruments for mandatory disclosure, such as National Instrument 43-101.

In the wake of the Supreme Court of Canada's decision in Reference re Securities Act1, however, where the Supreme Court made it clear that the day-to-day regulation of securities is the purview of the provinces, the announcement by the federal government this past summer may require the federal government to work with the Working Group, investor groups and the mining industry to push for the harmonization of provincial securities regulators, rather than passing federal legislation. The federal government, however, would have been well aware of both the Supreme Court's decision and the constitutional framework it faced prior to its announcement this past summer.

We will monitor the situation closely and provide updates as required. In the meantime, it would be helpful for companies to prepare internal accounting systems to track payment disclosure by project in the coming years to ensure compliance with the regulations expected to be passed into law within the next two years is not a costly or overly burdensome process.


1 2011 SCC 66, [2011] 3 S.C.R. 837.

Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global legal practice. We provide the world's pre-eminent corporations and financial institutions with a full business law service. We have more than 3800 lawyers based in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South Africa (incorporated as Deneys Reitz Inc) and Fulbright & Jaworski LLP, each of which is a separate legal entity, are members ('the Norton Rose Fulbright members') of Norton Rose Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein helps coordinate the activities of the Norton Rose Fulbright members but does not itself provide legal services to clients.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Norton Rose Fulbright Canada LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Norton Rose Fulbright Canada LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions