LONDON, United Kingdom England - Canada is adopting a G8 initiative that would require companies to disclose any payments they make to foreign governments, Prime Minister Stephen Harper announced Wednesday in London at a meeting with oil, gas and mining executives.
"Canada is recognized as a world leader in promoting transparency and accountability in the extractive sector both at home and around the world," Harper said in a statement.
"I am pleased today to announce that we will be further enhancing this reputation by establishing new mandatory reporting standards for Canadian companies operating in this sector."
Leaders of the world's eight richest nations pledged after their 2011 meeting in Deauville, France, to consider new rules that would allow for greater scrutiny of companies' payments to foreign governments. Critics say such measures are badly needed to expose corruption in countries with an abundance of natural resource riches.
Other countries, such as the United States and Hong Kong, already have similar measures in place.
Canada is a major player in the extractive industry, with hundreds of companies operating thousands of projects around the world.
Half of the mining that takes place around the world is done by Canadian companies. Sixty per cent of all the world's mining and exploration companies, and 35 per cent of all oil and gas companies, are listed on Canadian exchanges.
While there are already some standards and mechanisms in place for companies, these new rules would be enforceable by law.
The federal government will now consult with the provinces and territories, First Nations and aboriginal groups, industry and civil-society organizations as it sets up its reporting regime. A senior Canadian government official, speaking on the condition his name not be used, said he expects it will take about two years to hold consultations and develop a framework for the new reporting regime.
Details such as how the reporting regime would be policed, and by whom, along with potential penalties for any companies that do not report their payments to other countries, need to be ironed out. It's possible provincial securities regulators could play a role, the official said.
The government is also trying to avoid burdening companies with too much extra paperwork, he added.
Transparency is at the top of the agenda at the coming G8 summit in Northern Ireland. British Prime Minister David Cameron wants to leave the lakeside Lough Erne resort with an agreement on tougher transparency measures in hand.
But Cameron is reportedly encountering some resistance to a proposal that would force companies to reveal who actually owns them. Some might consider it somewhat embarrassing to the British prime minister, who is chairing the G8 summit, if he fails to seal a deal on ownership-disclosure rules.
Beyond talks about the economy and financial issues, the G8 is also expected to focus on international security, particularly the Syrian conflict, Iran and North Korea's nuclear programs and anti-terrorism measures in Africa's Sahel region.
The G8 summit comes as Canada and the European Union are trying to conclude lengthy negotiations on a free-trade agreement. The Prime Minister's Office has sought to play down any expectations a deal will be announced while Harper is in Europe this week, saying an agreement at this juncture is unlikely.
Canada is under pressure to conclude a deal before the European Union turns its attention to free-trade negotiations with the United States this summer.
Among the issues believed to be on the negotiating table are financial services, Canadian beef exports, country-of-origin rules for vehicles, procurement limits for provinces and municipalities and drug patent protection.
Meanwhile, sources tell The Canadian Press the Conservative government has agreed to smooth the way for more takeovers of Canadian companies by European firms in one of several concessions during free-trade talks.
Canada has also agreed to open up parts of its hydro-electric sector to a limited amount of foreign investment, say sources in Canada with intimate knowledge of the talks.
Canadian negotiators have also agreed to a provision to raise the threshold for reviewing foreign acquisitions from Europe to $1.5 billion, sources say. All acquisitions under that value would not be subject to a government assessment about whether they create a net benefit for Canada.