Extractive Sector Transparency Measures Act (ESTMA)

Ef­fec­tive date:

March 1, 2016

Enacted:

De­cem­ber 16, 2014

Overview

The Extractive Sector Transparency Measures Act (the “Act” or “ESTMA”) came into effect on June 1, 2015, such that extractive sector entities subject to the Act, are required to report annually on payments made to governments in Canada and abroad for fiscal years beginning after June 1, 2015.  The Act delivers on Canada’s international commitments to contribute to the global efforts to increase transparency and deter corruption in the extractive sector. 

The Act is applicable to entities, or controlled entities, engaged in the commercial development of oil, gas or minerals defined in two categories or activities: (i) the exploration or extraction of oil, gas or minerals; and/or (ii) the acquisition or holding of a permit, licence, lease or any other authorization to carry out any exploration or extraction of oil, gas or minerals. Minerals include “all naturally occurring metallic and non-metallic minerals, including coal, salt, quarry and pit material, and all rare and precious minerals and metals.”

An entity meeting the following criteria will be required to report payments to governments in a public document, namely an entity that (i) has securities listed on a stock exchange in Canada; or (ii) has a place of business in Canada, does business in Canada or has assets in Canada and meets two of the three minimum thresholds in one of its two most recent financial years: (a) has at least C$20 million in assets; (b) generated at least C$40 million in revenue; or (c) employs an average of at least 250 employees.

Annual reports under ESTMA are due 150 days after an entity’s financial year end, beginning with financial years commencing after June 1, 2015. As an example, companies with a December 31 year-end will be required to submit their first annual report by May 30, 2017. Reporting of payments made to aboriginal governments or entities is deferred for a two-year period until June 1, 2017.

The Act states that every person or entity that fails to comply with the reporting requirements, accessibility of the report and the record keeping requirements is liable to a fine of not more than $250,000. A continuing offence under the Act, constitutes a separate offence for each day on which the offence is committed or continued. 

Re­cent de­vel­op­ments

Date

De­vel­op­ment

Com­ments

December 16, 2014

ESTMA enacted

ESTMA is effective June 1, 2015

March 1, 2016

NRCan issued final guidance, technical reporting specifications and reporting templates

 

For fur­ther de­tails of this In­stru­ment, please re­fer to the Natural Resources Canada website.

Amend­ments un­der con­sid­er­a­tion

  • None

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