General framework for the application of administrative monetary penalties
The general framework for the application of administrative monetary penalties has been published by the Ministère de l’Énergie et des Ressources naturelle This link will open in a new window . Established under section 20 of the Act respecting transparency measures in the mining, oil and gas industries, the general framework specify the orientations and criteria guiding the application of the administrative penalties regime and penal proceedings.End of the insight
Transparency measures in the mining, oil and gas industries
An Act respecting transparency measures in the mining, oil and gas industries (the “Act”) was passed in October 2015. Under the Act, certain enterprises operating in these industries must declare certain payments made to certain payees. The purpose of the Act is to discourage and detect corruption, as well as foster the social acceptability of projects.
The Regulation respecting the application of the Act respecting transparency measures in the mining, oil and gas industries (the “Regulation”) came into force on August 3, 2017.
The Guidelines respecting the Act respecting transparency measures in the mining, oil and gas industries have been published on the web site of the ministère de l’Énergie et des Ressources naturelles This link will open in a new window.
The Ministère de l’Énergie et des Ressources naturelles is responsible for the application of the Act, but its administration has been conferred on the Autorité des marchés financiers (“AMF”).
We urge you to determine immediately whether you are subject to this new requirement. Please note that the Act provides for significant penalties for non-compliance.
Please contact the Autorité des marchés financiers for further information.
What do you need to know
Are you subject to the Act?
You are subject to the Act if you engage in exploration for or development of mineral substances or hydrocarbons and:
you are listed on a stock exchange in Canada and your head office is in Québec;
you have an establishment in Québec, exercise activities or have assets in Québec and, based on your consolidated financial statements, meet at least two of the following three conditions for at least one of your two most recent fiscal years:
you have at least $20 million in assets;
you have generated at least $40 million in revenue;
you employ at least 250 employees.
What payments do you have to declare?
If you are subject to the Act, you must declare monetary payments or payments in kind that meet the following criteria:
they are in relation to exploration for or development of mineral substances or hydrocarbons;
they fall within any of the following categories:
taxes and income tax, other than consumption taxes and personal income taxes;
fees, including rental fees, entry fees, regulatory charges and any other consideration for licences, permits or concessions;
dividends other than those paid as an ordinary shareholder;
bonuses, including signature, discovery and production bonuses;
contributions for infrastructure construction or improvement.
they were made to a payee such as a government, a body established by two or more governments, a municipality or any body that exercises, or is established to exercise, powers or duties of government for a payee;
they were made during any fiscal year beginning on or after October 22, 2015;
and the total amount paid in the same fiscal year to the same payee for the same category of payment is equal to or greater than $100,000.
Exception : You are not required to declare a payment made before June 1, 2017 to any of the following payees:
the Kativik Regional Government;
a Native nation represented by all the band councils, or councils in the case of northern villages, of the communities forming the Native nation, the Makivik Corporation, the Cree Nation Government, a Native community represented by its band council, a group of communities so represented or, in the absence of such councils, any other Native group;
a body established by at least two Native groups;
any body that exercises, or is established to exercise, powers or duties of government for such payees.
When and to whom do you have to declare these payments?
You must file a statement with the AMF within 150 days following the end of the fiscal year in which any of the above payments were made.
What is the form of the statement and how to transmit it?
The statement must be in the form provided in Schedule 1 to the Regulation (pdf - 176 KB)This link will open in a new window.
The statement must be accompanied by one of the following documents:
- a certificate signed by an officer or director of the entity subject to the Act to the effect that the information contained in the statement is true, accurate and complete in every major respect for the purposes of the Act;
- a report from an independent auditor, prepared in accordance with generally accepted auditing standards in Canada, expressing an unaltered opinion to the effect that the entity subject to the Act has complied with every significant aspect of the Act’s provisions.
The statement and, as the case may be, the accompanying certificate or independent auditor’s report must be filed with the AMF in electronic form (PDF) using the System for Electronic Data Analysis and Retrieval This link will open in a new window (SEDAR) accessible at www.sedar.com This link will open in a new window.
Please note that the AMF maintains a register of entities that have been filed statements under the Act.
What are the penalties for failure to comply with the Act?
The Act provides for significant monetary administrative penalties. For example, the AMF may impose a penalty of $1,000 for each day the statement is filed late. It may also impose a penalty of $10,000 for each day the enterprise refuses or neglects to comply with an order imposed under the Act. In addition, fines for penal offences under the Act can be as high $250,000.
For more information please consult the general framework This link will open in a new window for the application of administrative monetary penalties.
If you have any questions, please contact the AMF Information Centre:
Québec City: 418 525-0337
Montréal: 514 395-0337
Toll-free: 1 877 525-0337
Fax: 418 647-9963