Vol. 149, No. 12 — June 17, 2015
Registration
SI/2015-43 June 17, 2015
ECONOMIC ACTION PLAN 2014 ACT, NO. 2
Order Fixing June 1, 2015 as the Day on which the Extractive Sector Transparency Measures Act Comes into Force
P.C. 2015-627 May 28, 2015
His Excellency the Governor General in Council, on the recommendation of the Minister of Natural Resources, pursuant to section 377 of the Economic Action Plan 2014 Act, No. 2 (“the Act”), chapter 39 of the Statutes of Canada, 2014, fixes June 1, 2015 as the day on which the Extractive Sector Transparency Measures Act, as enacted by section 376 of the Act, comes into force.
EXPLANATORY NOTE
(This note is not part of the Order.)
Proposal
The Order fixes June 1, 2015, as the day on which the Extractive Sector Transparency Measures Act (the Act) comes into force. This Order is made pursuant to section 377 of the Economic Action Plan 2014 Act, No. 2.
Objective
The Order brings the Act into force, which is intended to contribute to Canada’s international commitments to deter corruption through transparency measures in the extractive sector.
Background
The Act delivers on Canada’s 2013 G8 commitment to contribute to global efforts against corruption in the extractive sector. As a leader in responsible resource development, the Government of Canada pledged that it would require businesses involved in the exploration or extraction of oil, gas, or minerals to publicly report every year on specific types of payments made to all levels of government, in Canada and abroad. Payment categories include taxes, fees, bonuses, infrastructure improvement payments, production entitlements, and dividends.
The Act received royal assent on December 16, 2014, and will apply to businesses engaged in the commercial development of oil, gas, or minerals (e.g. exploration and extraction activities) that are either a) listed on a stock exchange in Canada; or b) doing business in Canada and meet two of three size-related criteria in one of its two most recent financial years: (1) at least $20 million in assets; (2) $40 million in revenue; and (3) employs an average of 250 employees. Businesses that meet these conditions will be reporting entities.
In order to limit the reporting burden for companies, Canada’s reporting requirements are similar to measures developed in the United States and the European Union. The Act also provides the Government of Canada with the ability to allow reporting entities to substitute reports prepared in another jurisdiction (whose requirements are determined to be an acceptable substitute by the Minister of Natural Resources Canada) to meet Canada’s requirements.
Once the Act comes into force, reporting entities will be required to prepare reports for the financial years used by each company that begin following the June 1, 2015, coming-into-force date.
The Act includes a two-year delay from the coming-into-force date of the requirement for extractive businesses to report on payments made to Aboriginal governments in Canada. In other words, as of June 1, 2017, extractive businesses subject to the Act will be required to report on payments made to Aboriginal governments. The Government of Canada will continue engaging with Aboriginal groups during the deferral period.
The Minister of Natural Resources will be responsible for the administration and enforcement of the Act.
Implications
Bringing the Act into force fulfils an international commitment for Canada. It will result in increased transparency in the extractive sector in Canada, as well as in other countries, to deter corruption and increase publicly available information on revenues associated with the exploration and extraction of oil, natural gas or minerals.
Consultation
Provinces and territories, industry, non-governmental organizations, as well as Aboriginal groups and Aboriginal organizations, were extensively engaged during the development of the Act.
Department contact
Vincent Klassen
Director
External Relations
Department of Natural Resources Canada
Telephone: 613-943-4290
Email: Vincent.Klassen@nrcan.gc.ca