New "Publish What You Pay" Guidance from Natural Resources Canada

Natural Resources Canada (NRCan) has released its final Guidance and Technical Reporting Specifications documents (Guidance Documents) for implementation of Canada’s "publish what you pay" reporting requirements under the federal Extractive Sector Transparency Measures Act (ESTMA). ESTMA is part of Canada's commitment to global transparency and anti-corruption efforts in the extractive sectors and complements similar laws being adopted in the European Union and the United States.  

What You Need To Know 

  • ESTMA applies to entities listed on a stock exchange in Canada, and large private entities that have a place of business in Canada or assets in Canada, that are involved in the commercial development of oil, gas or minerals in Canada or abroad.
  • A mandatory process has been added to the final Guidance Documents to enroll with NRCan as a reporting entity under ESTMA, with enrollment requested by June 30, 2016.
  • ESTMA applies to financial years commencing after June 1, 2015 and reports must be posted online and submitted to NRCan within 150 days after the financial year end (i.e., for entities with a December 31 year-end, the first reports must be disclosed by May 30, 2017). Reporting of payments to Aboriginal governments in Canada is deferred for two years such that payments made after June 1, 2017 will be disclosed in the report filed in 2018.
  • Reporting is required for payments made to governments at any level (national, subnational or local) in Canada and abroad that relate to the commercial development of oil, gas or minerals and fall into the categories specified under ESTMA. Payments do not need to be reported if they fall under the threshold of C$100,000 (determined on a per category of payment, per government basis).
  • An officer, director or independent auditor must attest to the accuracy of the report when submitted.
  • Reporting entities as well as directors and officers not in compliance with ESTMA may be fined up to C$250,000 per day, subject to a due diligence defence.
  • Reporting entities should ensure they have developed their accounting systems and accountabilities for identifying government payees and satisfying the detailed reporting requirements under ESTMA. There may be complexities and challenges with respect to a company’s particular organization and operations which will need to be considered and addressed.


Canada's "publish what you pay" legislation—the Extractive Sector Transparency Measures Act (ESTMA)—came into force on June 1, 2015 as part of Canada’s commitment to global transparency and anti-corruption efforts. The legislation is overseen by NRCan; the final Guidance Documents follow NRCan’s public consultation in 2015 and remain largely unchanged from the draft Guidance Documents published in July 2015. NRCan is expected to hold compliance workshops later in 2016.

The history of ESTMA and the movement promoting transparency laws and publication of government payments in the resource sector, often focused on developing countries plagued with corruption and poverty, has been underway for over 20 years. The Extractive Industries Transparency Initiative (EITI) was introduced in 2003 as a voluntary initiative under which countries and companies in the extractive sector voluntarily disclose payments to governments. In recent years, countries (including the United States and those in the European Union) have begun introducing legislation imposing mandatory reporting requirements, the content of which largely follows the requirements under EITI. 

Application of ESTMA Reporting Requirements

ESTMA's reporting requirements apply to "entities" (corporations, trusts, partnerships or other unincorporated organizations) that are engaged in, or control an organization engaged in, the commercial development of oil, gas, or minerals in Canada or abroad, and that:

  • are listed on a stock exchange in Canada, or
  • do business or have assets in Canada and meet at least two of the following conditions (in one of last two financial years):
      • at least C$20 million in assets,
      • at least C$40 million in revenue, and
      • an average of at least 250 employees.

Timing for Reporting and Record Keeping

Reporting entities are required to submit a Contact Form to obtain an ESTMA identification number before they will be able to submit their reports to NRCan. NRCan has requested enrollment by June 30, 2016. The mandatory Contact Form and the templates for reports are available on the Government of Canada website here. Companies must keep reports publicly available for at least five years and all ESTMA reports published within the last five years will be made available on the same public link.  Reporting entities must keep records of their payments for at least seven years from the date of submission of the report.

ESTMA applies to financial years commencing after June 1, 2015. Reports must be posted on the company’s website and submitted to NRCan within 150 days of the reporting entity’s financial year end (i.e., for entities with a December 31 year-end, the first reports must be disclosed by May 30, 2017). Reporting of payments to Aboriginal governments in Canada is deferred for two years, such that payments made after June 1, 2017 will need to be disclosed in the report filed in 2018. Reporting of payments to Aboriginal or indigenous governments outside Canada is not deferred.

Reporting Requirements

Reporting entities must report payments at or above the C$100,000 threshold (discussed below) made to governments at any level, in Canada or abroad, in relation to the commercial development of oil, gas or minerals that fall into one of the seven categories specified under ESTMA. Parent companies of reporting entities will be able to issue a consolidated report for all of their subsidiaries that are required to report payments under ESTMA. NRCan has reaffirmed that in situations of joint control, such as joint ventures, reporting entities must report all payments that they make to a government. The payment must also be reported if a payment is made by an entity that is not subject to ESTMA but is controlled by a reporting entity, or if the payment is made on behalf of a reporting entity. The entity making the payment will need to report the payment (whether this payment is made as an operator or a member of a joint arrangement).  

Categories of Payments that Must be Disclosed. Reporting is required for monetary and in-kind payments in relation to the commercial development of oil, gas, or minerals that fall within any of following categories of payment:

  • taxes (e.g., income, profit and production taxes), excluding consumption (GST), withholding and personal income tax;
  • royalties;
  • fees (rental fees, entry fees, and regulatory fees), as well as other consideration for authorizations;
  • production entitlements;
  • bonuses (signature, discovery, and production bonuses);
  • dividends, other than dividends paid as ordinary shareholders;
  • infrastructure improvement payments; and
  • any other prescribed category of payment.

Challenging questions may arise in the context of the application of the reporting requirements to community and social responsibility contributions and infrastructure improvements.

Commercial Development. Commercial development includes exploration or extraction, or the acquisition or holding of a permit, licence, lease or other authorization for exploration or extraction. It will generally exclude ancillary or preparatory activities, and processing is excluded unless "integrated" with extraction.

Thresholds and Breakdown of Payments. Any payment of at least C$100,000 to the same payee (level of government) for a single category, or a series of payments in a single category that total at least C$100,000 must be reported. Reporting entities must group together payments to the same level of government (e.g., national, regional or municipal) to determine if the threshold is met, and reporting should specify payments to different government payees separately where practical (by government body). Payments are reported for the period when paid (not on an accrual basis), and the Technical Reporting Specifications provide guidance and templates for the breakdown of payments, currency conversions and the valuation of in-kind payments.

Project-level reporting is required where applicable, and reporting entities will need to independently consider how to classify and group projects. "Project" is defined in the Technical Reporting Specifications as operational activities that are governed by a single granting instrument or legal agreement that form the basis for payment liabilities with the government (or multiple agreements that substantially interconnected). "Substantially interconnected" is defined to mean a set of operationally or geographically integrated granting instruments or agreements "with substantially similar terms." The scope of projects will depend on your particular business and assets and may require careful consideration on how large or small the project should be defined, keeping in mind the purpose of transparency and the ability to identify payments to subnational and local governments.

Attestation. An officer, director or independent auditor must attest to the accuracy of the report "in all material respects" when submitted. NRCan may require an independent audit of a report. It will be important to ensure that management, the audit committee, the board and the auditors are aligned regarding accountabilities, controls, reporting and attestation of the report.

Payments to State-Owned Enterprises. With respect to State-Owned or Controlled Enterprises (SOE), the application of the reporting requirements will depend on the role the SOE is serving and whether it is performing a government function. Payments to an SOE acting in its capacity as a commercial business would not be reportable payments.

Offences and Penalties

Offences under ESTMA are subject to a fine of up to C$250,000 per day. Offences would include failure to meet the reporting requirements, failure to maintain records, knowingly making false statements or structuring payments to avoid the reporting requirements. Directors and officers who authorized, acquiesced or participated in an offence will have similar personal liability. Offences are subject to a due diligence defense, so companies (and their directors and officers) should ensure they have established proper processes, reporting, internal controls and accountabilities within their organization. When questions arise, companies should document their internal process, analysis, conclusions and rationale, and should seek expert advice when necessary to support their decision making.

Confidentiality and Conflicts of Law

There is no exception to the reporting requirements where the reporting entity is subject to confidentiality provisions or where reporting may violate local laws. To the extent a company’s payments are subject to confidentiality restrictions, it will be important to determine if there are exceptions for "disclosures required by law." The Guidance Documents state that the Government of Canada has held discussions with "countries of interest" to advise them of the reporting requirements and suggests that if a reporting entity encounters challenges, they should provide details to NRCan.


Reporting entities will be permitted to substitute reports from another jurisdiction’s "publish what you pay" regime to meet the requirements under ESTMA if that jurisdiction’s laws have been determined by NRCan to be an acceptable substitute. NRCan has published a determination that reports filed under the European Union’s reporting regime qualify as an acceptable substitute.


* With assistance from Brandon Schur, Articling Student.

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