On Feb. 26 2013, Liberal MP John McKay sponsored the first reading of Bill C-474 in parliament; also known as “The Sunshine Bill”. An Act respecting the promotion of financial transparency, improved accountability and long-term economic sustainability through the public reporting of payments made by mining, oil and gas corporations to foreign governments.
In the Honorable Mr. McKay’s own words the purpose of the Bill is “…intended to shine a light on the whole business of murky payments that go on in some transactions with respect to the obtaining and retaining of mining licenses.” In more general terms the bill would require Canadian resource companies (Mining, Oil or Gas) provide annual transparency reports disclosing payments made by the company to foreign governments. These reports would be submitted to the Minister of Foreign Affairs and the Minister of Natural Resources, as well as being made publicly available.
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This reporting procedure would differ from standard Security and Exchange Commission rules in that:
1) It applies to the payment of Consumption Taxes;
2) It applies to social payments, transfers and service fees of a contractual or employment agreement;
3) And reports must be independently audited prior to submission. (which can be anticipated to prove quite costly)
Many will recall John McKay of the now infamous Bill C-300, which received a unanimous show of opposition from the mining industry and was narrowly thrown out during its third reading in 2010.
It is Important to note that C-474 is a “Private Members Bill”, meaning it was not proposed by a member of cabinet, but rather a “back bencher”. These bills rarely make it through all three readings to become law. That being said, Bill C-300 was also a private members bill and was only narrowly thrown out in the final reading, with a final vote of 140-134 (against). But as the Conservatives hold a majority in the house it seems unlikely C-474 will make it past its second reading. Regardless, one can anticipate that many resource companies, and their lobbyists, will have taken notice of Mr. McKay’s renewed effort to increase government oversight within the industry.