On Monday, June 1, 2015, the federal Minister of Natural Resources, Greg Rickford, announced that the Extractive Sector Transparency Measures Act has come into force.
As we discussed in an earlier post, the Act will require companies operating in the extractive natural resources sector (oil and gas, mining) to report certain payments, including royalties, taxes, fees, production entitlements and infrastructure improvement payments, made to governments in Canada as well as to foreign governments.
Companies subject to the Act will now have to report specified payments made to any level of government which in aggregate exceed $100,000. The Act provides for a two-year deferral of implementation of reporting requirements in relation to Aboriginal governments; those requirements will now apply effective June 1, 2017. The federal government reports that engagement will continue with stakeholders, including Aboriginal governments and organizations, on the implementation of the Act.
Regulations setting out the details and format of the requirements are expected in the near future. The current financial year is excluded from the Act's application but reporting companies will want to implement internal systems and procedures in order to track reportable payments and file timely and accurate annual reports.
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