Extractive Sector Transparency Measures Act – Coming into Force June 1, 2015
June 1, 2015 at 3:55 PM
The Government of Canada announced today, that the Extractive Sector Transparency Measures Act, that it passed last year, comes into force as of June 1, 2015. This Act delivers on Canada’s commitment at the G8 summit of 2013 to develop reporting standards in the extractive sector, and is similar to the reporting requirements in the United States and the European Union.
This Act requires that, all extractive businesses subject to the Act will be required to report certain payments such as taxes, royalties, fees, and production entitlements of $100,000 or more to all levels of government in Canada and abroad. The Act applies to extractive entities subject to Canadian law and engaged in the commercial development of oil, natural gas, or minerals (including materials from pits and quarries). Companies subject to the Act include:
· Companies listed on a stock exchange in Canada
· Companies that are doing business in Canada and meet two of the following three criteria in one of their two most recent financial years:
o At least $20 million in assets
o At least $40 million in revenue
o Employ an average of 250 employees
Reporting entities will need to submit reports for each of their financial years that begin after June 1, 2015. The reporting of payments to Aboriginal governments in Canada has been granted a two-year deferral from the date the Act came into force (June 1, 2015). The government will allow reporting entities to submit reports prepared for another jurisdiction (whose requirements are determined to be an acceptable substitute by the Minister of Natural Resources Canada) to meet Canada’s requirements. The government is undertaking an assessment of measures taken in other jurisdictions, and has not yet determined which, if any, reports are an acceptable substitute for the requirements contained in the Act. The government is also developing policy guidelines on reporting payments, including the form and manner of reporting, and will announce them in due time.
We will update you as we receive further information. If you have any questions, please contact Natural Resources Canada at 613-995-0947.