The newly elected Liberal government in Quebec has endorsed a plan to require resource companies to publish payments they make to governments as part of a national effort to increase transparency and combat corruption.
The Quebec move comes as mining associations warn the Harper government that its insistence on including First Nations bands in a national “publish-what-you-pay” plan will likely mean Ottawa will fail to meet its pledge to have such a system in place by next year.
In his budget this week, Quebec Finance Minister Carlos Leitao said the government would work with the Quebec securities commission to require so-called extractive companies that are based in the province – mainly miners – to reveal payments made on a project by project basis, both domestically and in foreign countries.
Mr. Leitao’s announcement should provide some momentum to get other provinces and the federal government to move on a promise made by Prime Minister Stephen Harper last year to adopt such rules across Canada.
“We hope this will provide some momentum,” Pierre Gratton, president of the Mining Association of Canada, said in an interview Friday.
“We hope that there will be a domino effect” on other provinces and the federal government.
Ottawa said it would like to see securities regulators adopt the rules, but that effort is complicated by the long-standing dispute over the federal government’s attempt to build a national regulator. But Natural Resources Canada said in a discussion paper this spring that it would introduce legislation by this fall if provincial securities agencies do not move.
PDAC executive director Ross Gallagher said the Quebec rules would cover roughly 300 mining companies registered there, mostly small exploration firms.
The Mining Association and the Prospectors and Developers Association of Canada have teamed with two non-governmental organizations, Publish What You Pay Canada and Revenue Watch Institute in pushing for provincial securities commissions to require publicly-traded companies to include payment information in their annual filings.
Rules would also cover oil and gas companies, which face similar regulations in the United States and Europe.
Given Canada’s role as a major source of mining and oil industry activity in Africa and South America, this country’s participation is seen as a major part of the effort to shed light on how much governments collect in revenue from extractive industries, and where the money is spent.
Mr. Gratton said the group has focused its efforts on three provinces, Ontario, Quebec and British Columbia, with Ontario being the largest source of mining capital. He said the Ontario Securities Commission has not committed to adopting a publish-what-you-pay rule, in part because it is awaiting political direction from a government that is now in the midst of an election.
While Ottawa has endorsed the idea, the proponents worry that it has reduced the chances for success by insisting on including all industry payments to First Nations governments, including impact benefits agreements and contracts with band-owned businesses.
In a letter to Natural Resources officials sent last month, Mr. Gallagher and Mr. Gratton urged Ottawa to take a “phased approach” to the implementation – excluding First Nations until all sides have had ample opportunity to consult. An overly hasty approach could seriously damage relations between aboriginal Canadians, government and the mining industry, which currently has hundreds of benefit agreements with First Nations organization across Canada, they said.