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LONDON and VANCOUVER — Canada is joining a list of countries pushing resource companies for more disclosure about payments to foreign governments. But there is a growing debate about how complex the global system will become, how measures will be implemented, and whether they will provide enough useful information.
International development organizations have been demanding greater disclosure of these payments for years, arguing it’s a way of fighting corruption in developing countries. They also hoped the information would offer insights into the actual contributions these companies make to the countries where they operate.
The U.S. and the European Union have already adopted measures requiring extractive firms to report taxes, royalties and other fees paid to foreign governments. The U.S. rules have only recently taken effect and the EU’s directive has yet to be fully implemented.
Prime Minister Stephen Harper announced Wednesday that Canada plans to develop similar reporting standards for Canadian mining and energy companies.
Canada’s “participation will help transform the way industry reports payments worldwide,” Mr. Harper said after meeting a group of business leaders in London, the first stop on a short European tour leading up to the G8 summit next week in Northern Ireland.
British Prime Minister David Cameron, who is chairing the G8 meeting, has made transparency and tax avoidance top issues for the gathering.
Mr. Harper also announced that Canada will also work, on behalf of the G8, with Peru and Tanzania to help those countries improve transparency in their oil, gas and mining sectors by improving their tax systems, auditing functions and collection of royalties.
It’s not clear what the new reporting measures will entail. The federal government said it intends to work with the provinces, industry, First Nations and other groups to develop regulations.
Canada’s move was welcomed by industry and non-profit groups.
“This is a really important step forward,” said Tony Hodge, President International of the Council on Mining and Metals, who was among the business people who met with Mr. Harper on Wednesday. Mr. Hodge said Canada was wise to work with the provinces, including provincial securities regulators, and First Nations since they play crucial roles in the mining sector. “This is going to lead to better information.”
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