Mineral Exploration is the official publication of the Association of Mineral Exploration British Columbia.
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42 S P R I N G 2 0 1 5 • Taxes, other than consumption taxes and personal income taxes; • Royalties; • Fees, including rental fees, entry fees and regulatory charges as well as fees or other consideration for licences, permits or concessions; • Production entitlements; • Bonuses, including signature, discovery and production bonuses; • Dividends other than dividends paid as ordinary shareholders; • Infrastructure improvement payments; and • Any other prescribed category of payments. The Act states that the applicable minister may specify the way in which payments are to be organized and indicates that it may be on a project basis, which would be in line with other jurisdictions now in force. Such alignment would, if acceptable, enable substitution of reports from those other jurisdictions. The Government of Canada is working with other jurisdictions to develop a common or similar reporting template that could reduce reporting burdens. Enforcement and penalties The Act empowers the applicable minister, as designated by the federal government, with broad authority to ensure compliance, including the authority to order audits of an entity's reports and to inspect an entity's corporate offices. Failure to adhere to report- ing requirements; knowingly making false or misleading state- ments or providing false information; or structuring payments with the intention of avoiding reporting such payments is pun- ishable upon summary conviction with a fine of $250,000. Under ESTMA section 24(4), each day that passes prior to correcting a non-compliant report results in a new offence, thus the fine of $250,000 is "per day" that the offence remains uncorrected. In addition to entity liability, Section 25 also imposes liability on directors, officers or employees. Section 26(b) provides a defence if an entity can establish that it exercised due diligence to prevent the commission of an offence. This should encourage companies to develop strong compliance structures akin to and parallel with the Corruption of Foreign Public Officials Act. Exemptions ESTMA does not list any exemptions for its reporting require- ments, which harmonizes it with the EU and the U.S. However, section 23(1)b grants the Governor in Council (GIC) the power to make regulations that could exempt entities, payments or pay- ees. This section allows the government to modify the reporting requirements should they contradict a particular country's laws, but it could also be used to distort the reports to the benefit of powerful lobbying interests. Concerns The federal government committed to ensuring that Canada's payment-reporting framework would be consistent with exist- ing international standards. Civil society groups have expressed concerns that section 9(5) lacks details regarding the way in which payments are reported. In particular, the Act does not specify that reports are to be on a disaggregated, project-level basis, as required by the EU and U.S. legislation. Civil society also has concerns with section 23(1)f, which allows the GIC to make regulations respecting the information that is to be made available to the public. This section allows the