On June 11, 2015, the Québec National Assembly introduced
Bill 55 – An Act respecting transparency measures in the
mining, oil and gas industries (Bill 55), in view of imposing
transparency measures in the mining, oil and gas industries. These
transparency measures, the Bill writes, are meant to discourage and
detect corruption, as well as foster the social acceptability of
natural resource exploration and development projects.
Mining companies have already seen their disclosure obligations
increase with the latest amendment to the Mining Act,
adopted in December 2013. The
law requires mining companies to publicize the quantity and
value of the ore extracted and royalties paid annually for each
mining lease, as well as their rehabilitation and restoration plan.
In some respect, stakeholders in the industry believed these
obligations had been reduced by Bill 28, which provided that the
information would not be made public and would only be used for
statistical purposes. However, the Minister for Mines reiterated
recently that the core information – quantity and value of
the ore, royalties, etc. – would indeed remain public.
Under Bill 55, the concerned entities will have to file an
annual statement to the Autorité des marchés
financiers declaring all payments of more than $100,000 made
to a government, a government entity and a native nation. The
statement would be made public by the concerned entities for a
period of five years. This includes taxes, royalties, fees,
production entitlements, dividends, bonuses, contributions for
infrastructure construction or any other type of payment determined
by regulation. Payments made to native nations, however, would
benefit from a two-year exemption and would only need to be
reported from June 2017.
The threshold to be qualified as a concerned entity is easily
met. Bill 55 would apply to any entity that engages in exploration
for, or development of, mineral substances or hydrocarbons and
is listed on a stock exchange in
Canada and has its head office in Québec; or
has an establishment in
Québec, exercises activities or has assets in Québec
and meets at least two of the following conditions for at least one
of its two most recent fiscal years: (i) has at least $20 million
in assets; (ii) has generated at least $40 million in revenue; or
(iii) employs an average of at least 250 employees.
Bill 55 may be read as having an extraterritorial reach as the
concerned entities would have to report for any and all payments
made to any government in the world, provided that such payments
meet the threshold discussed above. In the same vein, the Bill
provides that the Minister may share the information received to
other governments to better accomplish its transparency objectives.
There has been little comment so far on this part of the Bill.
Finally, Bill 55 provides for heavy sanctions for the concerned
entities who fail to abide by certain keys provisions. Said
concerned entities would be liable to a fine of $250,000.
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.
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