Whether it is in royalties, bonuses or fees, extractive companies make significant payments to resource-rich countries around the world for their natural resources. Until recently, these numbers were shrouded in secrecy, which meant that citizens had no way of knowing how much money their governments were making from their natural resources, nor how those revenues were being spent. PWYP Canada advocated for legislation to require Canadian extractive companies to publish their payments per project in countries where they operate around the world. In 2014, PWYP Canada’s campaign for mandatory disclosure, a campaign carried out in collaboration with partner organizations and the Canadian mining industry, was successful as the Government of Canada passed the Extractive Sector Transparency Measures Act. The Act requires large, private mining, oil and gas companies, alongside those listed on a Canadian stock exchange, to disclose the payments they make to governments in Canada and abroad on a country-by-country and project-by-project basis.
With this information
Citizens and civil society are now able to access this revenue data and can use it to hold their governments to account for how their natural resource revenues are being managed. Canada is home to 60% of the world's publicly traded mining companies and a third of the world's oil companies. With operations in over 100 countries, legislation in Canada gives citizens from all over the globe access to this important information.
The benefits of this disclosure stretch beyond citizens and communities, to include a variety of stakeholders. For investors, it helps to assess country and project specific governance, reputational and tax risks. For companies, enhanced transparency is good for business, helping to promote a more stable investment climate and secure a social license to operate. Furthermore, transparency can benefit resource governance by providing a tool for governments to build capacity for tax collection and management.
Much of the advocacy on this issue was done as part of the Resource Revenue Transparency Working Group, made up of civil society and mining organizations. You can find out more about this collaboration on the page dedicated to the group.
Over the past few years, global momentum for rules that oblige extractive companies to publish what they pay has grown with legislation being adopted by EU member states, Norway, Ukraine and the US. Visit the International Publish What You Pay website to find out more.
Mandatory Disclosure Campaign in Canada
How much money laundering is occurring in Canada?
The RCMP estimates that $15 billion dollars is laundered each year in the country and anonymous companies are the ideal route.
Canada has become an international destination for setting up secret companies to “snow-wash” illicit funds from all over the world. It is easier to set up a secret company than it is to get a library card! This is because in Canada, the true owners of companies and properties can remain entirely anonymous—their identities can be concealed even from the government agencies entrusted with enforcing laws. This makes it easy for criminals, tax evaders and those financing terrorism to launder money in Canada and makes it hard for law enforcement, tax authorities, and financial institutions to enforce Canada’s existing anti-money laundering and anti-terrorist financing laws. Canada needs to create a publicly accessible, centralized, registry of true (e.g. beneficial) owners of companies in an open, searchable format. This would serve as a deterrent to criminals and would facilitate access to information for law enforcement, financial institutions, civil society, and journalists.
Recognizing this significant problem, Publish What You Pay Canada, Transparency International Canada, and Canadians For Tax Fairness joined forced to advocate for Canada to create a publicly accessible pan-Canadian company registry of beneficial owners. Canada is behind and needs to catch up to its international partners to end snow-washing. Find out more about our campaign here.
PWYP Canada, Transparency International Canada, and Canadians for Tax Fairness are grateful to Open Society Foundations for supporting this campaign for increased beneficial ownership transparency in Canada.
We are calling for a publicly available centralized registry of the beneficial owners of all companies registered, listed, and operating in Canada, both provincially and federally.
PWYP Canada advocates for the disclosure of the contracts signed between extractive companies and host governments. Contracts provide essential information for people and civil society to ascertain whether they are getting a fair deal for their resources, and also to be able to monitor whether both the government and companies are respecting their obligations (as contracts often include information such as environmental protection measures and information on land use and rights). For companies, disclosing contracts can help increase trust while clarifying their obligations towards a community promotes a better relationship.
Any oil, gas or mining company that is publicly listed in Canada must already comply to a certain degree of contract disclosure as they are required to publish any ‘material’ contract on which their business is substantially dependent and represents the majority of the company’s business (50% or more). This current requirement requires a higher degree of transparency for junior extractive companies, as they are more likely to focus on a single project or on a handful of projects, increasing the likelihood of a project comprising over 50% of their business. Larger multinational companies are less likely to be required to disclose contracts given that they often have a multitude of projects worldwide.