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Calgary – As Canada’s aboriginals play a larger role in the development of Canada’s natural resources, the federal government is taking steps to boost the transparency of the payments they receive from developers.
But the move, which would force annual disclosure of payments worth $100,000 or more, is drawing push-back from those affected the most — aboriginals and the oil industry.
Yet greater transparency would promote better practices, increased accountability, set ground rules and inform the public debate around the impacts of resource extraction on Canada’s aboriginal people. The proposal is part of an international effort to put a spotlight on payments made by extractive industries to governments.
But Ottawa’s proposal goes farther. It would require payments made by oil and gas and mining companies to all levels of governments, including aboriginal communities, domestically and abroad, to be disclosed, preferably through public filings to provincial securities regulators.
During a speech to the recent Prospectors & Developers Association of Canada mining conference in Toronto, Joe Oliver, who moved this week from natural resources to finance, re-enforced Ottawa’s intention to move forward with legislation by April 1, 2015, and encouraged provinces and territories to play a leadership role.
Alberta is already moving toward greater disclosure. The province passed a law last year with the authority to require resource developers to disclose agreements with aboriginal groups, but on a confidential basis.
“The Alberta rules are important as they are the first significant legislative attempt by a government in Canada to pry open these agreements,” said Sam Adkins, partner, business law, at McCarthy Tetrault LLP in Vancouver.
Federally, Mr. Oliver said that if provincial disclosure standards are not implemented, Ottawa would move ahead on its own.
Greater public awareness of the payments could change the narrative around First Nations and resource extraction.
For example, the information could provide new insights into the scope and size of aboriginal gains from development, challenging the view that resource extraction only comes at a cost to their territories and traditional ways of life.
Today, gains are difficult to quantify because they are kept under wraps in private agreements between industry and aboriginal communities. Some resource developers regard their expertise in dealing successfully with aboriginals as a competitive advantage. Many consultants and legal advisors are involved in the dealmaking.
The agreements are happening, they are significant and the perception is that they are getting larger. They involve all sorts of incentives — business opportunities, revenue sharing, equity participation, investment in facilities and cash.
Often the understanding is that aboriginals who benefit from projects will support regulatory approvals, or at least not oppose or delay them.
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