Sophie Amyot, Hugo-Pierre Gagnon, François Paradis, Julien Hynes-Gagné
Aug 13, 2015
On June 11, 2015, the Québec National Assembly introduced Bill 55 – An Act respecting transparency measures in the mining, oil and gas industries (Bill 55), in view of imposing transparency measures in the mining, oil and gas industries. These transparency measures, the Bill writes, are meant to discourage and detect corruption, as well as foster the social acceptability of natural resource exploration and development projects.
Mining companies have already seen their disclosure obligations increase with the latest amendment to the Mining Act, adopted in December 2013. The law requires mining companies to publicize the quantity and value of the ore extracted and royalties paid annually for each mining lease, as well as their rehabilitation and restoration plan. In some respect, stakeholders in the industry believed these obligations had been reduced by Bill 28, which provided that the information would not be made public and would only be used for statistical purposes. However, the Minister for Mines reiterated recently that the core information – quantity and value of the ore, royalties, etc. – would indeed remain public.
Under Bill 55, the concerned entities will have to file an annual statement to the Autorité des marchés financiers declaring all payments of more than $100,000 made to a government, a government entity and a native nation. The statement would be made public by the concerned entities for a period of five years. This includes taxes, royalties, fees, production entitlements, dividends, bonuses, contributions for infrastructure construction or any other type of payment determined by regulation. Payments made to native nations, however, would benefit from a two-year exemption and would only need to be reported from June 2017.
The threshold to be qualified as a concerned entity is easily met. Bill 55 would apply to any entity that engages in exploration for, or development of, mineral substances or hydrocarbons and that
is listed on a stock exchange in Canada and has its head office in Québec; or
has an establishment in Québec, exercises activities or has assets in Québec and meets at least two of the following conditions for at least one of its two most recent fiscal years: (i) has at least $20 million in assets; (ii) has generated at least $40 million in revenue; or (iii) employs an average of at least 250 employees.
Bill 55 may be read as having an extraterritorial reach as the concerned entities would have to report for any and all payments made to any government in the world, provided that such payments meet the threshold discussed above. In the same vein, the Bill provides that the Minister may share the information received to other governments to better accomplish its transparency objectives. There has been little comment so far on this part of the Bill.
Finally, Bill 55 provides for heavy sanctions for the concerned entities who fail to abide by certain keys provisions. Said concerned entities would be liable to a fine of $250,000.