On June 12, 2013, the federal government announced its intention to adopt new mandatory reporting standards for payments made to foreign and domestic governments by Canadian extractive companies. Industry organizations, such the Prospectors & Developers Association of Canada (PDAC) and the Mining Association of Canada, as well as a number of Canadian mining companies, have indicated that they support the proposed initiative and believe that Canada's participation in the global movement toward greater transparency is critical. With 65% of the world's public mining issuers listed on the Toronto Stock Exchange and the TSX Venture Exchange, the impact of the Canadian requirements will be broad and influential.
The announcement follows the recent adoption of reporting standards in the United States and the announcement of an intention to adopt reporting standards by the European Union. The U.S. rules require disclosure of payments to governments for each project. The Canadian announcement did not include any details regarding the form that the new rules might take or whether the regime would require project reporting, as in the United States, or a different basis of reporting, such as the disclosure by license proposed to be required in Europe.
The federal government indicated it will be working with the provinces, First Nations and representatives from the extractive industries to formulate an effective and efficient system for transparency, balancing accountability with sensitivity to the administrative burdens of regulatory reporting requirements. No timetable for the release of the proposed rules has been announced.
The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.
