Extractive Sector Transparency Measures Act (S.C. 2014, c. 39, s. 376)

Short Title

Marginal note:Short title

1 This Act may be cited as the Extractive Sector Transparency Measures Act.

Interpretation and General Provisions

Marginal note:Definitions

2 The following definitions apply in this Act.

category of payment

category of payment means a category of payment set out in any one of paragraphs (a) to (h) of the definition payment. (catégorie de paiement)

commercial development of oil, gas or minerals

commercial development of oil, gas or minerals means

• (a) the exploration or extraction of oil, gas or minerals;

• (b) the acquisition or holding of a permit, licence, lease or any other authorization to carry out any of the activities referred to in paragraph (a); or

• (c) any other prescribed activities in relation to oil, gas or minerals. (exploitation commerciale de pétrole, de gaz ou de minéraux)

entity

entity means a corporation or a trust, partnership or other unincorporated organization

• (a) that is engaged in the commercial development of oil, gas or minerals in Canada or elsewhere; or

• (b) that controls a corporation or a trust, partnership or other unincorporated organization that is engaged in the commercial development of oil, gas or minerals in Canada or elsewhere. (entité)

gas

gas means natural gas and includes all substances, other than oil, that are produced in association with natural gas. (gaz)

minerals

minerals means all naturally occurring metallic and non-metallic minerals, including coal, salt, quarry and pit material, and all rare and precious minerals and metals. (minéraux)

Minister

Minister means the member of the Queen’s Privy Council for Canada designated under section 5. (ministre)

oil

oil means crude petroleum, bitumen and oil shale. (pétrole)

payee

payee means

• (a) any government in Canada or in a foreign state;

• (b) a body that is established by two or more governments;

• (c) any trust, board, commission, corporation or body or authority that is established to exercise or perform, or that exercises or performs, a power, duty or function of government for a government referred to in paragraph (a) or a body referred to in paragraph (b); or

• (d) any other prescribed payee. (bénéficiaire)

payment

payment means a payment — whether monetary or in kind — that is made to a payee in relation to the commercial development of oil, gas or minerals and that falls within any of the following categories of payment:

• (a) taxes, other than consumption taxes and personal income taxes;

• (b) royalties;

• (c) fees, including rental fees, entry fees and regulatory charges as well as fees or other consideration for licences, permits or concessions;

• (d) production entitlements;

• (e) bonuses, including signature, discovery and production bonuses;

• (f) dividends other than dividends paid as ordinary shareholders;

• (g) infrastructure improvement payments; or

• (h) any other prescribed category of payment. (paiement)

Marginal note:Rules relating to payments

3 For the purposes of this Act,

• (a) a payment that is made to an employee or public office holder of a payee is deemed to have been made to the payee;

• (b) a payment that is due to a payee and that is received by a body that is not a payee for the payee is deemed to have been made to the payee;

• (c) a payment that is made by an entity, other than an entity referred to in subsection 8(1), that is controlled by another entity is deemed to have been made by the controlling entity;

• (d) a payment that is made for an entity is deemed to have been made by the entity; and

• (e) the value of a payment in kind is the cost to the entity — or, if the cost cannot be determined, the fair market value — of the goods or services that it provided.

Marginal note:Control

• 4 (1) Subject to the regulations, an entity is controlled by another entity if it is controlled by the other entity, directly or indirectly, in any manner.

• Marginal note:Deemed control

  (2) An entity that controls another entity is deemed to control any entity that is controlled, or deemed to be controlled, by the other entity.

Designation

Marginal note:Designation of Minister

5 The Governor in Council may, by order, designate a member of the Queen’s Privy Council for Canada as the Minister for the purpose of this Act.

Purpose of Act

Marginal note:Purpose

6 The purpose of this Act is to implement Canada’s international commitments to participate in the fight against corruption through the implementation of measures applicable to the extractive sector, including measures that enhance transparency and measures that impose reporting obligations with respect to payments made by entities. Those measures are designed to deter and detect corruption including any forms of corruption under any of sections 119 to 121 and 341 of the Criminal Code and sections 3 and 4 of the Corruption of Foreign Public Officials Act.

Her Majesty

Marginal note:Binding on her Majesty

7 This Act is binding on Her Majesty in right of Canada or a province.

Application

Marginal note:Entities

• 8 (1) Subject to subsection (2), sections 9 to 13 apply to

  • (a) an entity that is listed on a stock exchange in Canada;

  • (b) an entity that has a place of business in Canada, does business in Canada or has assets in Canada and that, based on its consolidated financial statements, meets at least two of the following conditions for at least one of its two most recent financial years:

    • (i) it has at least $20 million in assets,

    • (ii) it has generated at least $40 million in revenue,

    • (iii) it employs an average of at least 250 employees; and

  • (c) any other prescribed entity.

• Marginal note:Continuation of obligations

  (2) An entity that ceases to be an entity referred to in subsection (1) before the end of a period referred to in section 12 or 13, as the case may be, continues to be subject to the obligations of that section until the end of the applicable period.

Obligations

Reporting Payments

Marginal note:Annual report

• 9 (1) Every entity must, not later than 150 days after the end of each of its financial years, provide the Minister with a report that discloses, in accordance with this section, the payments that it has made during that year.

• Marginal note:Payments to be disclosed

  (2) Subject to any regulations made under paragraph 23(1)(d), an entity must disclose any payments within a category of payment that are made to the same payee, if the total amount of all those payments during the financial year is at least

  • (a) the amount prescribed by regulation for the category of payment; or

  • (b) if no amount is prescribed for the category, $100,000.

• Marginal note:Deemed payee

  (3) For the purpose of subsection (2), a payment that is made to a payee referred to in paragraph (c) of the definition payee is deemed to have been made to the government or body for which it is established to exercise or perform, or that for which it exercises or performs, a power, duty or function of government.

• Marginal note:Attestation

  (4) The report is to include an attestation made by a director or officer of the entity, or an independent auditor or accountant, that the information in the report is true, accurate and complete.

• Marginal note:Form and manner

  (5) The Minister may specify, in writing, the way in which payments are to be organized or broken down in the report — including on a project basis — and the form and manner in which a report is to be provided. The Minister is to make those requirements available to the public in the manner that he or she considers appropriate.

Marginal note:Substitution

• 10 (1) If, in the Minister’s opinion, and taking into account any additional conditions that he or she may impose, the payment reporting requirements of another jurisdiction achieve the purposes of the reporting requirements under this Act, the Minister may determine that the requirements of the other jurisdiction are an acceptable substitute for those set out in section 9. The determination is to be in writing and made available to the public in the manner that the Minister considers appropriate.

• Marginal note:Provision of substitute report

  (2) If the Minister has determined that the requirements of a jurisdiction are an acceptable substitute, an entity that is subject to those requirements is deemed to have provided a report in accordance with section 9 if the entity

  • (a) provides the report required by the jurisdiction to the jurisdiction’s competent authority;

  • (b) provides a copy of that report to the Minister, in the form and manner that he or she specifies, within any period specified in the jurisdiction’s reporting requirements for providing the report to the competent authority; and

  • (c) meets any conditions imposed by the Minister under subsection (1).

Marginal note:Wholly owned subsidiary — consolidated report

11 If an entity and any wholly owned subsidiary of the entity are entities referred to in subsection 8(1), the subsidiary is deemed to have provided a report in accordance with section 9 for a financial year if

• (a) the entity provides the Minister with a report with respect to its payments in accordance with section 9 that also contains information with respect to the payments made by the subsidiary during the subsidiary’s financial year or any part of that year, which information must meet the reporting requirements of section 9;

• (b) not later than 150 days after the end of its financial year, the subsidiary notifies the Minister in writing that the entity is providing the report; and

• (c) the subsidiary provides the Minister with a report in accordance with section 9 with respect to payments that it has made during any part of its financial year that is not covered by the report provided by the entity.

Marginal note:Accessibility of report

• 12 (1) An entity must, on providing the Minister with a report in accordance with section 9 — or on being deemed to have done so by the operation of subsection 10(2) or section 11 — make any information required by regulations made under paragraph 23(1)(f) available to the public or, if no such regulation is made, make the report and any information provided to the Minister under paragraph 10(2)(c) available to the public.

• Marginal note:Manner and period

  (2) The report and information must be made available to the public

  • (a) in the manner specified by the Minister; and

  • (b) for the period prescribed by regulation or, if no period is prescribed, for a period of five years.

Record Keeping

Marginal note:Records

13 An entity must keep records of its payments made in a financial year for a prescribed period or, if no period is prescribed, for a seven-year period that begins on the day on which the entity provides the report in accordance with section 9 for the financial year or is deemed to have done so by the operation of subsection 10(2) or section 11.

Administration and Enforcement

Information and Independent Audit

Marginal note:Order — required information

• 14 (1) For the purpose of verifying compliance with this Act, the Minister may, by order, require an entity to provide to him or her, within the period specified in the order, any information or documents, including

  • (a) a list of projects for the commercial development of oil, gas, or minerals in which the entity has an interest and the nature of that interest;

  • (b) an explanation of how the entity has treated a payment for the purpose of preparing a report referred to in subsection 9(1) or meeting the requirements set out in paragraphs 10(2)(a) to (c);

  • (c) a statement of any policies that the entity has implemented for the purpose of meeting its obligations under this Act; and

  • (d) the results of an audit of its report or of the records of payments for the financial year to which the report relates.

• Marginal note:Audit

  (2) The audit is to be carried out in accordance with the generally accepted auditing standards specified in the order by an independ­ent auditor who meets the requirements specified in it.

• Marginal note:Non-application of Statutory Instruments Act

  (3) The Statutory Instruments Act does not apply to an order referred to in subsection (1).

Designation

Marginal note:Designation

15 The Minister may designate persons or classes of persons for the purposes of the administration and enforcement of this Act.

Designated Person’s Powers

Marginal note:Entry into a place

• 16 (1) A designated person may, for a purpose related to verifying compliance with this Act, enter any place in which the person has reasonable grounds to believe there is anything to which this Act applies or any document relating to the administration of this Act.

• Marginal note:Powers on entry

  (2) The designated person may, for the purpose referred to in subsection (1),

  • (a) examine anything in the place including any document;

  • (b) use any means of communication in the place or cause it to be used;

  • (c) use any computer system in the place, or cause it to be used, to examine data contained in or available to it, or reproduce the data, or cause it to be reproduced, in the form of a printout or other intelligible output and remove any printout or output for examination or copying;

  • (d) prepare a document, or cause one to be prepared, based on the data;

  • (e) use any copying equipment in the place, or cause it to be used;

  • (f) take photographs or make recordings or sketches of anything in the place;

  • (g) direct any person to put any equipment in the place into operation or to cease operating it;

  • (h) prohibit or limit access to all or part of the place or to anything in the place; and

  • (i) remove anything from the place for the purpose of examination.

• Marginal note:Persons accompanying designated person

  (3) The designated person may be accompanied by any person that they believe is necessary to help them exercise their powers or perform their duties or functions under this section.

• Marginal note:Assistance

  (4) The owner or person in charge of the place and every person in the place must give all assistance that is reasonably required to enable the designated person to exercise their powers or perform their duties or functions under this section and is to provide any documents or information, and access to any data, that is reasonably required for that purpose.