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Federal bill to boost transparency of public, private resource companies

Perry Bellegarde, chief of the Little Black Bear First Nation in Saskatchewan, addresses the audience as native leaders from across Canada attend the Assembly of First Nations' 35th annual general meeting in Halifax on Thursday, July 17, 2014. Mr. Bellegarde said First Nations leaders worry the government’s proposed rules for resource companies will infringe on their jurisdiction and undermine benefit agreements they reach with said companies. The legislation was part of an omnibus bill introduced Thursday.


The federal government has introduced legislation requiring resource companies to publish what they pay to foreign and domestic governments, with a plan to include First Nations governments after two years.

Representatives of mining and oil and gas industries welcomed the bill Friday, saying it would make it easier for them to demonstrate the benefits of their investments to local communities at home and abroad.

The long-promised legislation was part of an omnibus bill introduced Thursday, and will impose fines for companies that fail to report payments exceeding $100,000. It covers all publicly traded companies, as well as privately held ones that meet two of the following three conditions: have at least $20-million in assets, $40-million in revenue or 250 employees.

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Prime Minister Stephen Harper promised to pursue the "publish-what-you-pay" initiative at a G20 meeting in Britain in 2013. Some industry groups had urged the provincial securities commissions to take the lead on the effort to be consistent with similar rules in the United States and the European Union.

Ottawa has included aboriginal governments under the bill as part of its broader push to impose on them new accountability and transparency rules.

First Nations have raised concerns about how the legislation would affect them and their corporations that do business with the resource sector. Ottawa is delaying the implementation of the bill for aboriginal governments for two years to allow time for consultations, though aboriginal leaders question to value of consultations given that a bill has already been introduced in the House of Commons.

Federal officials say the transparency rules will cover all aboriginal bodies and corporations that function in a government role, but not their commercial companies. A spokesman for the Assembly of First Nations declined comment Friday.

Saskatchewan's Perry Bellegarde – who is running for national chief of the Assembly of First Nations – warned Ottawa will have to properly accommodate aboriginal concerns.

"They should have consulted before they introduced the bill," he said. "But the two-year delay is a good thing."

Mr. Bellegarde said First Nations leaders worry the proposed rules will infringe on their jurisdiction and undermine benefit agreements they reach with resource companies.

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The Canadian mining industry worked with non-governmental organizations to encourage the adoption of mandatory reporting rules, arguing their efforts will receive greater social licence if citizens can clearly see the contributions companies make to local governments.

The international effort aims to curb corruption in the developing world, where multinational companies often operate amid poor accountability rules and little transparency for the taxes, fees and royalties they pay to governments.

"We're glad to see it out," said Ben Chalmers, vice-president with the Mining Association of Canada. He said the bill includes "most if not all" of recommendations made by the association, the Prospectors and Developers Association of Canada and Publish What You Pay Canada.

The Canadian Association of Petroleum Producers said it, too, supports the principle of the legislation but, vice-president Alex Ferguson said there are many details that need to be spelled out in regulations that are to come.

The federal legislation allows for the provincial securities commissions to take over publish-what-you-pay regulations for publicly traded companies, but so far, no province has indicated it is ready to proceed.

Claire Woodside, of Publish What You Pay Canada, said her group was still analyzing the bill but was pleased the government is intent on moving forward. She said the legislation leaves many questions unanswered, including whether the reporting will be done on a project-by-project basis to provide maximum transparency.

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