Extractive Sector Transparency Measures Act Data Portal

The Extractive Sector Transparency Measures Act (ESTMA or “the Act”) was enacted by the Parliament of Canada in December 2014 and came into force on June 1, 2015. The Act responds to a commitment that Canada made at the 2013 G8 Leaders’ Summit; where leaders agreed to raise global standards of transparency in the extractive sector, reduce the potential for corruption, and ensure that citizens benefit fully from the extraction of natural resources.

The Act requires businesses to publicly report certain payments they make to all levels of government in Canada and abroad in relation to the commercial development of oil, gas and minerals. The purpose of the ESTMA is to deter corruption in the global extractive sector by making government revenues from natural resources transparent to the public. The reports are made available on publicly accessible websites by reporting businesses, and a link to every report submitted is available in the ESTMA Data Portal.

An Entity under the Act is a corporation or a trust, partnership or other unincorporated organization that is engaged in the commercial development of oil, gas or minerals. This definition includes businesses that control, directly or indirectly, other Entities that engage in such activities.

An “Entity” under the Act is required to report if:

• If the Entity or the Entity’s securities are listed on a stock exchange in Canada.

OR

• If the Entity has a place of business in Canada, does business in Canada, or has assets in Canada, and meets two (2) of the three (3) following minimum thresholds (“size-related criteria”) in one of its two (2) most recent financial years:
• Has at least C$20 million in assets.
• Generated at least C$40 million in revenue.
• Employs an average of at least 250 employees.

These two tests above are exclusive of one another. For example, an Entity with common shares listed on the TSX Venture Exchange will be a Reporting Entity, even if it does not have a place of business in Canada or does not meet any of the size-related criteria.

“Payee” is the term used in the Act to describe governments and related organizations that receive reportable payments under the ESTMA. For purposes of the Act, a Payee is:

1. Any government in Canada or in a foreign state.
2. A body that is established by two or more governments.
3. Any trust, board, commission, corporation or body or other authority that is established to exercise or perform, or that exercises or performs, a power, duty or function of a government for a government referred to in paragraph (a) above or a body referred to in paragraph (b) above.

Payments must be reported at the project level, when possible. This means that, where possible, businesses (“Entities”) must specify in the reporting template the name of the project to which a particular payment relates. Some payments, such as corporate income taxes, may not be attributable to a specific project. Entities can report these payments at the Payee level only.

A “project” means the operational activities that are governed by a single contract, license, lease, concession, or similar legal agreement and form the basis for payment liabilities with a government. If multiple such agreements are substantially interconnected, they would be considered a single project.

“Substantially interconnected” means forming a set of operationally and geographically integrated agreements (e.g. contracts, licenses, etc.) with substantially similar terms that are signed with a government, resulting in payment liabilities.

Under the ESTMA, companies must submit their reports to Natural Resources Canada no later than 150 days after the end of their financial years. Most companies reporting under the ESTMA have financial years from January 1st – December 31st, which aligns with the calendar year. These companies also share a common reporting deadline. Other companies have financial years that do not align with the calendar year (e.g. April 1st – March 31st), which means that they have different ESTMA reporting deadlines. As such, a financial year does not necessarily refer to the same calendar period for all companies. Given this consideration, the reporting “year” refers to the period of time required for Natural Resources Canada to receive reports for a given financial year from all enrolled companies.