Developing Mandatory Reporting Standards for the Extractive Sector


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Purpose of Consultations

  • The Government of Canada is committed to establishing mandatory reporting standards, working with provinces, Aboriginal groups, industry and civil society to design practical and effective measures.
  • Provinces and territories are encouraged to play a leadership role and implement mandatory reporting standards, since provincial securities commissions remain the most natural and effective oversight mechanism.
  • If equivalent standards are not implemented by provinces/territories, the federal government will enact legislation by April 1, 2015 to move this initiative forward.
  • Reporting standards will require Canadian extractive companies (oil & gas, mining) to publish annual reports of payments domestically and abroad of $100,000 or more (i.e., either cumulative over the year or one-time payments) on a project-level basis made to all levels of government, including Aboriginal.
  • Consultations aim to: 1) provide information on the proposed reporting standards; and 2) receive feedback on key reporting requirements, the proposed reporting process, and other implementation issues.
  • Consultations build on discussions over the past year with provinces/territories, industry, Aboriginal groups and civil society.

Intent of the Mandatory Reporting Standards

  • Demonstrate leadership with respect to the good governance of natural resources and responsible business conduct;
  • Help ensure citizens in resource-rich countries around the world are better informed and benefit from the natural resources in their country;
  • Enhance Canada's 'brand' and the reputation of our extractive firms;
  • Create a level playing field and stable investment climate for Canadian firms abroad;
  • Respect Canadian jurisdictional responsibilities;
  • Reflect stakeholder views;
  • Limit cost and administrative burden (e.g., avoiding duplication and seeking equivalency with other reporting processes such as the EU Transparency Directive and the U.S. Dodd-Frank Act); and
  • Result in reports that are easily accessible and understandable by the public.

Who needs to report?

  • The obligation rests with extractive companies (oil & gas, mining).
  • Governments will not have to report.
  • Standards will apply to publicly listed, as well as medium and large private companies, operating or headquartered in Canada in the:
    • commercial development of oil, natural gas, and minerals (i.e., exploration, extraction, processing (primary), and export (transport out of country)).
  • Medium and large private companies will be required to report if they meet or exceed 2 of the 3 following thresholds:
    • $20 million in assets;
    • $40 million in net turnover;
    • and/or 250 employees.
  • Foreign and domestic companies (or their subsidiaries) operating in Canada would be required to report if they have a controlling interest in any extractive project in Canada or abroad.

What is reported?

  • Payments of $100K or more (i.e., either cumulative over the year or one-time payments) for each of the categories outlined below.
  • Consistent with the U.S. and EU approach, the following payment categories will be reported:
    • taxes levied on the income, production or profits of companies, excluding consumption taxes;
    • royalties;
    • fees, including licence fees, rental fees, entry fees and other considerations for licences and/or concessions;
    • production entitlements;
    • bonuses, such as signature, discovery and production bonuses;
    • dividends paid in lieu of production entitlements or royalties; and
    • payments for infrastructure improvements.
  • Payments to Aboriginal entities (to be defined) will be captured, including relevant payments included in Impact Benefit Agreements (IBAs).
  • Reporting will be done at the project-level.
  • It is proposed that a project be defined as an operational activity performed by an extractive company, the parameters of which are defined by the company according to its particular industry and business context.
  • Companies may choose to disclose smaller payments on a voluntary basis.
  • Companies would not be required to disclose 'social payments' (e.g., funding for arenas, community centres, hockey teams, training programs, etc.).

What is the proposed reporting process?

  • Reports will be based on a common reporting template, informed by the templates of the U.S. and EU.
  • Completed reports would be posted annually on company websites, where information would be made publicly available for free and unrestricted use.
  • Companies would issue a public notice stating the reporting has been posted.
  • Would inform Government that the notification had been sent and reporting requirements met.
  • A link would be made to the reports through the Treasury Board Secretariat's Open Government website.

What is the proposed process for monitoring, verification and auditing?

  • Companies would ensure the information they provide has third party assurance/verified by a third party, according to internationally recognized accounting standards.
  • Selected companies would be reviewed annually under the direction of Government of Canada staff.
  • A compliance and enforcement mechanism will be established in accordance with the relevant legal framework.

Equivalency with other jurisdictions, exemptions

  • The aim is equivalency with similar standards, such as the U.S. Dodd-Frank Act and the EU Transparency Directive, or any similar standard introduced by provinces/territories.
  • Intent: that companies operating in multiple jurisdictions need only produce a single report.
  • A review process would ensure continued alignment with other mandatory reporting standards (e.g., in the U.S. and EU).
  • Neither the U.S. or EU allow for exemptions in their regulations, as drafted. The U.S. Security Exchange Commission (SEC) is considering the implication of a U.S. District Court decision that found insufficient rationale was provided on exemptions.
  • It is proposed that that no exemptions for reporting be granted.
  • Potential conflicts between the legal obligation to report under the mandatory reporting standards and confidentiality clauses in contracts will be considered by legal experts.

Summary: Mandatory Reporting Standards

  • Build on the work of the Resource Revenue Transparency Working Group
  • Equivalency provisions for other jurisdictions (e.g., U.S. EU and provinces/territories)
  • Extractive companies, both public as well as medium and large private companies, would be required to report
  • The reporting threshold is $100,000; smaller amounts could be disclosed on a voluntary basis
  • It is proposed that payments to Aboriginal entities be reported
  • Reports will be posted on company websites, with a link to their locations on the Treasury Board's Open Government website

Questions for Consultation

General Considerations

  • How could public information on extractive company payments benefit extractive companies, the public and Aboriginal communities?
  • What considerations should the Government of Canada take into account in communicating this initiative to stakeholders and the public?

Companies required to report

  • Private companies will be subject to the reporting requirements equivalent to those foreseen by the EU Transparency Directive. What are the implications of using these criteria?

Payments to Aboriginal entities

  • It is proposed that company payments to the following types of Aboriginal entities be reported:
    • Aboriginal organizations or groups with law-making power and/or governance mechanisms related to the extractive sector (i.e., mining, oil and gas);
    • provincially or federally incorporated Aboriginal organizations that undertake activities in the extractive sector on behalf of their beneficiaries
    • Aboriginal organizations or groups that are empowered to negotiate legally binding agreements (e.g., impact benefit agreements) on behalf of their members.
  • How should payments to foreign indigenous entities be captured?


  • What is the best way to ensure equivalency with standards in other jurisdictions?
  • What should be the elements/format of a common reporting template?
  • Accurate reporting of payments will be important to the integrity of this initiative. What measures need to be in place to ensure that there is no double-counting?


  • What are implications of imposing penalties for non-reporting and purposeful misrepresentation of data?

Reporting Process

  • What is a practical template and when should annual reports be due?
  • How could reports be made accessible to the public? How could information be made easily available to Aboriginal groups and communities?
  • What would be the easiest way for companies to notify both the Government of Canada and the public that they have met reporting obligations?

Verification process

  • What is the viability of having the reporting data third-party verified?

Potential for a conflict of laws

  • What is the potential for conflict between the proposed mandatory reporting standards with host country laws prohibiting disclosure? What are potential mechanisms or strategies to address conflicts?
  • What is the potential for a conflict between contract law and the proposed mandatory reporting standards? How should confidentiality clauses in Impact Benefit Agreements be addressed?


The Spring 2014 consultations will build on those undertaken in 2013.

March - April 2014: Consultation sessions, including posting material on the Treasury Board Secretariat's Open Government portal for public comment until May 9, 2014. Summaries of consultations will be made available on the Treasury Board website.

If equivalent standards are not implemented by provinces/territories, the federal government will enact legislation, which will require the following timeline:

  • June – August 2014 – Legislation is drafted;
  • September 2014 – Legislation introduced in the House of Commons;
  • December 2014 – Legislation considered by Parliament;
  • January – March 2015 – Regulations developed; and
  • April 1, 2015 – Legislation enacted.

ANNEX – Comparison Table

Comparing Canada to the Emerging Global Standards
  Canadian Approach U.S. Dodd-Frank Act EU Transparency Directive
Extractives covered Mining, oil & gas Mining, oil & gas Mining, oil & gas, forestry
Types of companies Public, and medium and large private extractive companies (those that meet or exceed 2 of 3 of the following thresholds: $20M assets; $40M in net turnover; or 250 employees.) Public (listed with U.S. SEC) Public (listed on all EU stock exchanges), plus large unlisted companies that meet or exceed 2 of 3 of the following thresholds: €20M assets; €40M in net turnover; or 250 employees.
Payments to Governments In Canada – all levels, including Aboriginal entities

To foreign governments – all levels

In US – federal only

To foreign governments – all levels

To foreign governments – all levels
Threshold of Reporting $100,000 $100,000 €100,000
Penalties To be determined. Removed from SEC Subject to individual EU members' future legislation (e.g., fines, criminal prosecution)
Timelines June 2015 Two years or more June 2015 (implementation by Member States)
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